State Bank of India (SBI),
which will see five associate banks merge into it on April 1, has decided to
shut down almost half the offices of these banks, including the head offices of
three of them. This process will start from April 24.
"Out of the five head
offices of the associate banks, we will retain only two. Three head offices of
the associate banks will be unbound along with 27 zonal offices, 81 regional
offices and 11 network offices of the associate banks," SBI Managing
Director Dinesh Kumar Khara told IANS in an interview.
"We will keep their
structure in place till April 24 and, post that, we will start dismantling the
associate banks' controlling offices, which includes head offices, regional
offices, zonal offices and network offices," Khara said.
The five associate banks that
will merge with SBI are: SBBJ (State Bank of Bikaner and Jaipur), SBM (State
Bank of Mysore), SBT (State Bank of Travancore), SBP (State Bank of Patiala)
and SBH (State Bank of Hyderabad).
SBI is India's largest bank
with assets of Rs 30.72 lakh crore and figures at No. 64 in the global ranking
of banks (as of December 2015; December 2016 ranking is still awaited). Post-merger,
with assets of approximately Rs 40 lakh crore, it will be among the top 50
banks in the world. SBI Chief Economist Soumya Kanti Ghosh told IANS that,
post-merger, the bank will be at No. 45.
The shur-down move is to avoid
overlapping offices in the same area and "we intend to remove any kind of
duplicacy in the controlling structure", Khara said.
The five associate banks will
cease to exist as legal entities and become a part of SBI from April 1, but the
various merger processes will start only after April 24, once the balance
sheets of the five entities are audited and added.
"We will have to get the
balance sheets of the associate banks audited a day prior to the merger, that
is, on March 31. The balance sheets of the banks will be drawn up and added; it
takes 15-20 days. Soon after the audit is done, the branches will be completely
merged with SBI," Khara told IANS.
There are currently 550 SBI
offices while its associate banks have 259. The target for the number of
controlling offices after the merger is 687 -- a reduction of 122 offices.
Employees directly affected by
these shutdowns -- estimated at 1,107 -- will be redeployed, mostly in
customer-interface operations, Khara said.
"The net result is that
people in controlling functions will be available for deployment on the ground
for improving reach to the consumer," he said.
"There are about 5-7
people in every regional office and 20-odd people in each zonal office. One
regional office controls 30-40 branches, while 4-5 regional offices are
controlled by one zonal office," he told IANS.
The associate banks have also
offered a Voluntary Retirement Scheme (VRS) to employees who do not wish to
relocate. "VRS is only an option, else they will be relocated. They will
have a different role," he said.
Along with the winding-up of
these offices, a number of merger processes will come into effect simultaneously,
including the data merger of the five entities.
"Data merger will also
start from April 24 and we will finish it by May end. That is the plan of
action," he said, adding that the bank had given itself six months to
complete all merger-related processes.
"I would rather say that
within a quarter all the things should be in order. Ideally, we would like to
have it in one quarter, but it will not spill over beyond the second
quarter," Khara said.
SBI says the merger will be
done seamlessly as it has the experience of two earlier mergers. State Bank of
Indore was merged with SBI in 2010, while State Bank of Saurashtra was merged
in 2008.
Source: business-standard