Bank employees call for strike against consolidation move
November 16, 2009
The All India Bank Employees Association (AIBEA) and the All India Bank Officers Association (AIBOA) are up in arms against the proposed move by managements of State Bank of India (SBI) and State Bank of Indore to merge the two entities into one by closing down State Bank of Indore. They have alleged that the management has ‘secretly’ and ‘surreptitiously’ got a resolution adopted to that effect in a board meeting held on 19 June 2009.
The AIBEA is basically against further consolidation in the banking industry. According to the Secretary of AIBEA, Vishwas Utagi, any further attempts at consolidation with public sector banks will only be harmful for the banking system and the people. This proposed ‘closure’ of State Bank of Indore will leave the service conditions of its employees at the mercy of the SBI management. The AIBEF is concerned that the move is a self-serving ploy by SBI to strengthen its balance sheet, but at the cost of smaller public sector banks. Further, it believes that the government and SBI management are attempting to take undue advantage of the Section 35 of the SBI Act to acquire any public sector bank in their agenda of consolidation. Apparently, SBI is looking at more public sector banks to be merged with itself. Mr Utagi feels that closing down State Bank of Indore’s shutters will come as a loss not only to the employees, but also to the people who use its services and to the Madhya Pradesh government, which earns bucketful of revenues from the State-run banker. He believes it is expansion, and not consolidation that should be pursued by the government.
Earlier, when AIBEA had called a strike against this move, a conciliation meeting was held by the labour ministry, where management of both companies were advised not to pursue the matter for the time being and to take any action that may vitiate the cordial relations. The management also gave a commitment to work out an amicable solution with the labour organisations before taking the matter ahead. In response, the labour unions agreed to defer the strike. In the meantime, the management of State Bank of Indore apparently went back on their commitment and approved a scheme for acquisition of the bank by SBI.
CH Venkatachalam, General Secretary of AIBEA, said, “What this means is that State Bank of Indore will be dissolved and closed, and its assets and liabilities will be taken over by SBI, on the terms and conditions decided by them. How can they close down a bank which is doing well without any discussion? The management has not adhered to the advice of the labour ministry and violated their own commitment in the signed minutes before the chief labour commissioner.”
He further added that such mergers will only serve to increase the size, not the strength of the banking system. The AIBEA believes the merger is aimed at strengthening SBI to compete with international competition. “Our banks are not meant for international competition. They are meant to serve domestic needs first, especially the rural poor. When they are talking of financial inclusion, consolidation move will result in closing down of branches, to create a leaner structure. Ultimately, services to rural people will be impacted.”
The AIBEA has also taken up other issues, protesting against reducing the government’s shareholding in the equity of public banks and permitting Foreign Direct Investment (FDI) in public sector banks. It is also against selling of non-performing assets (NPAs) to asset reconstruction companies (ARCs). –Sanket Dhanorkar with Aaron Rodrigues[email protected]