LS approves merger of State Bank of Saurashtra with SBI

14 Dec 2009, 2017 hrs IST


NEW DELHI: The Lok Sabha on Monday post facto put its seal on merger of the State Bank of Saurashtra (SBS) with State Bank of India (SBI) amid opposition from Left parties

"The pay and allowances and service conditions of the employees of SBS will not be altered to their disadvantage," Minister of State for Finance Namo Narain Meena said as the House approved the two bills to given effect to the merger that took place last year.


The bills to repeal the State Bank of Saurashtra Act and amend the SBI (Subsidiary Banks) Act were passed by voice vote.


Meena also said no branches of SBS are being closed as a result of the merger. "There should be no apprehension on this count", he said.


The associate bank was merged with the SBI in October 2008 following resolutions passed by the boards of both the banks.


The amendments, though a legislative formality, was opposed by CPI-M and CPI which saw in the merger a larger design to privatise the state-owned banking sector.


"The bill has a hidden agenda to consolidate state-owned banks into a monolith...the purpose for which is privatisation of the bank," A Sampath (CPI-M) said, while opposing the bills.


Opposing the bills, Prabodh Panda (CPI) demanded that government should have a comprehensive debate on its "agenda" for merging associate banks with the SBI.

Thousands of bank employees, he added, would go on strike on December 16 to protest against such merger and consolidation in the banking sector.

Jagada Nanda Singh (RJD) regretted that government was pursing the banking policy only to protect and promote the interest of large borrowers.


Bhartruhari Mahtab (BJD) wanted to know whether there was a difference of opinion between the Finance Ministry and Reserve Bank over consolidation in the banking sector.


T K S Elangovan (DMK) said the merger would not be in the interest of either employees or shareholders or customers.


Sumitra Mahajan (BJP) said it was incorrect on the part of the government to merge associate banks with the SBI as the exercise would not benefit anyone.


The regional character of the associate banks, he said, should be maintained to further the goals of financial inclusion and promote banking in all parts of the country.


P C Chacko (Cong) said that mergers have become the order of the day and would help SBI to compete with international players.


The merger, he said, was accepted and approved by the boards of the two banks.

Shailendra Kumar (SP) said people have emotional attachment with the banks and the merger would end the regional character of the associate banks.

Source:Loksabha News