|
|
|
For a country like India that was facing challenges of economic development and
financial inclusion, “consolidation is not an answer”, and “public sector
banking has to be further spread and expanded,”10
he said.
Following this, around one million employees and officers of banks resorted to a
strike on January 25, 2008, to protest against the consolidation move within the
SBI group. UFBU also decided to go on strike for two days a
month later – on February 25 and 26, 2008 – and if their demands
continued to remain unmet, to call for an indefinite strike from end
March 2008 onward.
|
To add to SBI’s woes, some parliamentarians and politicians – protecting
the interests of their constituencies – also jumped on to the
anti-consolidation bandwagon.
According to industry experts, the unstated objections on the part of
associate bank employees to the proposed merger were the longer wait for
promotions and upsetting of the hierarchy equations arising out of the
integration of workforces of the associate banks with SBI cadre.
With tougher and more conservative appraisals in the parent bank,
employees of associate banks feared uncertainties regarding upward
professional mobility and a relative loss of status vis-à-vis their SBI
counterparts. However, there were positives too.
For instance, associate bank employees who only enjoyed two benefits –
gratuity and pension or provident fund (PF) – would gain the third
benefit arising out of a merger, as all SBI employees were entitled to
pension benefits as well.
According to analysts, the time had come for unions – in their long-term
interest – to drop demands like filling up of vacancies, and accept
rationalization of the workforce and the need for equipping PSBs with
specialist skills so that these banks could compete effectively with the
new private banks that had grown phenomenally between 2000 and 2007.
Also post-2009, PSBs would need to compete with new foreign banks which
would get a level playing field vis-à-vis domestic banks and which were
expected to be very active in the Indian banking scene.
References and Further Readings
1. Manas Chakravarty, “SBI Plans a Cosmetic Merger,” www.livemint.com,
August 29, 2007
2. D. Murali, “Why Did SBI pick up State Bank of Saurashtra to Kick Off
Consolidation,”
www.thehindubusinessline.com, August 30, 2007
3. “SBI Plans Right Issues, Merger of Subsidiaries,” www.domain-b.com,
September 4, 2007
4. K.R. Srivats, “Unions Oppose State Bank of Saurashtra Merger with SBI,”
www.thehindubusinessline.com, September 9, 2007
5. “What Will Be the Face of Indian Banking after 2009?”
www.merinews.com, November 29, 2007
6. Harish Dhawan “SBI Plans to Merge all Associate Banks by March 2009,”
www.topnews.in.com, December 26, 2007
7. “Bank Employees to Strike Work on Jan 25,”
www.thehindubusinessline.com, January 4, 2008
8. C.R.L. Narasimhan, “Banks Jostle for a Bigger Market Share,”
www.hindu.com, January 7, 2008
9. “SBI Associates Banking on SBI Merger Provisions,”
www.economictimes.indiatimes.com, January 8, 2008
10. “SBI-Associate Merger in Limbo,” www.indianexpress.com, January 19,
2008
11. “Bank on Consensus” www.thehindubusinessline.com January 22, 2008
12. “SBI Looking to Add an ICICI Bank to its Kitty,”
www.labnol.org/india/corporate/sbi-looking-to-add-an-icici-bank-to-its-kitty/1257/
Cases on Related Topics
State Bank of India: Competitive Strategies of a Market Leader
Yes Bank: Competitive Strategy of a Late Entrant
UTI Bank to AXIS Bank: A Corporate Rebranding Exercise
|
