For a long time, the merger of State Bank of India with its 5 associate banks was in discussion stage but this year, the talks are at an advanced stage.SBI would soon take over its subsidiaries & Bharatiya mahila bank (BMB) within the next 6 months.With the government`s approval only pending, no major hurdles exist for the consolodation.We take through your impact of this merger on future recruitments in SBI & associate banks.
State Bank of India is india`s largest public sector bank with over 14,000 branches across the nation.It also has 5 banking subsidaries popularly known as the associate banks - State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore.
Though these subsidary banks share the same logo of SBI, each has its own headquarters & management team & policies.
Merger to complete within 3 months
To compete against new generation private banks, the Indian government is looking to merge all the subsidaries under a single entity - State Bank of India.
“Once we get the approval of consolidation, we will meet the unions” said the SBI Chairperson Arundhati Bhattacharya when questioned about the next step.
Finance Minister, Arun Jaitley recently said “We are expecting approval shortly", which shows the union government is also favouring consolidation in banking sector.
After these formalities are over, all 5 associate banks would be merged with SBI in one shot within the next 3 - 6 months .Efforts are also on to bring Bharatiya Mahila Bank started in 2013 into its fold immediately.
SBI to Recruit Less in Future
Currently, the vacancies in SBI & its 5 associate banks are filled through separate recruitments.After the merger, all associate banks would be called State bank of India & the names - State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore will no longer exist.
The merged entity will make SBI one of worlds`s top 50 banks with an asset base of Rs 37 trillion (Rs 37 lakh crore), 50+ crore customers, 22,500 branches and 58,000 ATMs.
If you are unsure on what changes are expected to happen post merger, here are some important implications:
1) There will be no SBI associate bank recruitments hereafter.Instead, there will be only one recruitment for the entire SBI group.
2) Many branches of associate banks would be closed to avoid overlap of business & rationalise operations.Moreover it shall also lower operational costs.
3) Current employees wont lose their jobs.They could be assigned to other roles as per the new structure.Many are already fearing transfers if their branches are closed.
4) New recruitments will be announced but dont cannot expect large number of vacancies atleast for the next couple of years.
While senior officials of the management board say that the merger wont have an impact, bank unions fear of losing their autonomy.
SBI managing director, V G Kannan has said “We do not contemplate any loss of jobs. There is no question of any risk and these are unnecessary fears. Recruitments are happening yearly, so we will just end up recruiting less people.”
Will the proposed merger of associate banks with SBI create more job opportunities or limit them cannot be predicted at this moment.
But one thing is for sure - indian banking sector is gearing up for a complete overhaul.