Chennai: Opposing the central government's decision to merge State Bank of India's (SBI) five associate banks with the former, around 45,000 employees of the associate banks will strike on July 12, said a top official.
The All India Bank Employees'Association (AIBEA) official said that on July 13, there will be a nationwide strike in all banks by AIBEA and All India Bank Officers' Confederation (AIBOC).
"Consolidation in the banking industry is not a priority now. On the other hand, recovery of the bad loans should be the priority. Prior to the July 12 strike we will hold series of demonstrations opposing the merger," C.H.Venkatachalam, general secretary, AIBEA told IANS.
He said SBI should focus on recovering its bad loans of around Rs 100,000 crore.
SBI has five associate banks - State Bank of Bikaner and Jaipur (SBJJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT). Of them, SBM, SBJJ and SBT are listed on the bourses.
On Wednesday the Union Cabinet gave its in-principle clearane for the merger of six banks-the five SBI associate banks and the Bharatiya Mahila Bank Limited.
In a statement issued by SBI, Bhattacharya said: "The merger of SBI and its associate banks is a win-win for both. While the network of SBI would stand to increase, its reach would multiply.
"One can expect efficiencies to be created from rationalisation of branches, common treasury pooling and proper deployment of a large skilled resource base. Currently, no Indian bank features in the top 50 banks of the world. With this merger, some visibility at global level is likely to increase."
Global credit rating agency, Moody's Investors Service had estimated it would cost SBI around Rs.16.6 billion ($250 million) for the merger and will have limited impact on its credit metrics, including its asset quality and capitalisation level.
It also said the opposition to the merger by the employee unions also poses considerable risk that potential synergies of the merger may not materialise.
Currently, the five associate banks operate as standalone banks with their own financials, board and management team, with oversight from SBI.
In addition, SBJJ, SBM and SBP are also listed with the presence of minority shareholders.