PRESS STATEMENT BY: C.H. VENKATACHALAM, GENERAL SECRETARY OF AIBEA
30 November 2007
Ø We oppose merger of Associate Banks with SBI
Ø We support All India Strike in Associate Banks on 3rd & 4th December, 2007
Employees and officers working in the Associate Banks have given a call for All India Strike in the Associate Banks on Dec ember 3rd and 4th, 2007 against the proposed merger of State Bank of Saurashtra and other Associate Banks with State Bank of India. From AIBEA we extend our total support and solidarity with their Strike.
PUBLIC SECTOR BNKS – THE SHEET ANCHOR OF ECONOMIC DEVELOPMENT: Today there are 27 Public Sector Banks in our Country consisting of State Bank of India, 7 Associate Banks & 19 Nationalized Banks. These Public Sector Banks have been crafted and created with very clear objectives of socio-economic development with the special responsibility of catering to the otherwise neglected sectors like rural areas, agriculture, small & medium industries, cottage industries, employment generation, poverty reduction, reducing regional disparities etc., with the growth and contribution of Public Sector Banks, today elite class banking has been transformed into mass banking where banking services have by and large reached the common people and the rural areas.
THEY TALK OF FINANCIAL INCLUSION BUT MERGER WILL RESULT IN FINANCIAL MONOPOLY AND EXCLUSION OF COMMON PEOPLE: When everyone talks of total financial inclusion, there is a need to further expand Public Sector Banks. But unfortunately Government wants to shrink and reduce the social profile of Banks in the name of global competition. By mergers, thousands of bank branches will be closed down and customer services will be affected.
MERGER WILL NOT MAKE THE BANKS STRONG: For the sake of competing with global banks, our Government wants to merge the Banks in the name of making them stronger & big enough to compete with multi-national Banks. But our Banks cannot become stronger in comparison to global banks just by mergers.
Example:
(a) Total capital of our 27 Public Sector Banks : 12400 Crores or $ 3 billion
Capital of Citi Bank, USA : $ 63 Billion
Capital of HSBC, UK : $ 69 Billion
Capital of Standard Chartered Bank, UK : $ 65 Billion
(b) Assets of Banks
Barclays Bank, UK : $ 1592 Billion
UBS, Switzerland : $ 1568 Billion
Mitsubishi, Japan : $ 1509 Billion
HSBC, UK : $ 1502 Billion
Citi Bank, USA : $ 1494 Billion
State Bank of India : $ 107 Billion
Punjab National Bank : $ 32 Billion
Canara Bank : $ 29 Billion
Bank of Baroda : $ 25 Billion
27 Public Sector Banks : $300 Billion
Hence by merger of our Banks, we cannot become stronger compared to global Banks.
MERGER OF ASSOCIATE BANKS WITH STATE BANK OF INDIA - WHY ?
There is an argument that Associate Banks cannot survive on their own & hence should be closed down & merged with State Bank of India. But facts are otherwise
For example:
|
Bank |
Capital Adequacy Ratio (in %) |
Business per employee (Rs. in lakhs) |
Profit Per employee (Rs. in lakhs) |
Net NPA to Net Credit (in %) |
Return on Assets |
|
STATE BANK OF INDIA |
12.3 |
357 |
2.37 |
1.56 |
0.84 |
|
ASSOCIATE BANKS |
|||||
|
State Bank of Patiala |
12.4 |
600 |
3.24 |
0.80 |
0.77 |
|
State Bank of Travancore |
11.7 |
506 |
2.96 |
1.08 |
0.86 |
|
State Bank of Bikaner & Jaipur |
12.9 |
368 |
2.57 |
1.09 |
0.89 |
|
State Bank of Mysore |
11.5 |
398 |
2.60 |
0.45 |
1.10 |
|
State Bank of Hyderabad |
12.5 |
473 |
3.92 |
0.22 |
1.14 |
|
State Bank of Indore |
11.8 |
476 |
2.91 |
1.04 |
0.87 |
All these vital parameters of performance show that Associate Banks are equally efficient and perhaps better than State Bank of India (SBI). In the respective Regions & States, business volume and network of Branches of Associate Banks are more than State Bank of India. It is a wrong notion that Associate Banks are weak.
Associate Banks are bigger than SBI in the concerned States:
The Associate Banks have grown and progressed over the years with overwhelming contributions to the economy and development of the concerned States where they are predominantly located. All these Associate Banks are performing well and are better comparable to many other nationalised banks too. In some of the States, these Associate Banks are even bigger in size and business compared to SBI in the concerned State.
For Example:
(a) State Bank of Travancore Vs SBI in Kerala
SBT SBI
No. of Branches 573 228
Deposits 20,523 crores 10,801 crores
Advances 13,483 crores 7,265 crores
(b) SBBJ Vs. SBI in Rajasthan
SBBJ SBI
No. of Branches 678 183
Deposits 15,237 crores 4,631 crores
Advances 10,503 crores 4,134 crores
Total Staff 8,463 2,885
Hence. by merging the Associate Banks, their developmental role will be totally disturbed.
Merger of Banks would result in:
F Closure of Banks & closure of large number of Branches
F Financial monopoly and hence insensitive to needs of common people
F Shrinkage of customer services since number of Branches would be closed due to overlapping.
F Global competition which would mean dilution of social banking
F Weakening of Banks’ role in domestic economic development
F Surplus of thousands of employees and officers and hence danger to job security
F Would reduce competition & increase monopoly
F Would reduce credit to agriculture and other priority sectors since priority will be global business
F More flow of credit to multinational corporations & big business houses at the cost of the needs of the common masses.
Hence AIBEA is opposed to such moves of consolidation and merger of Public Sector Banks.
WE SUPPORT STRIKE IN ASSOCIATE BANKS BY EMPLOYEES AND OFFICERS: In support of the Strike on 3rd & 4th December, 2007 in the Associate Banks, all bank employees under the banner of AIBEA will hold demonstrations and all our unions will send telegrams to Finance Minister, RBI Governor & Chairman of SBI.
MORE STRIKES : If the Government and SBI management would proceed further with the merger of Associate Banks, it has been decided to launch further intensified programmes including All India Strike by all employees of all Banks in the first week of January 2008.
C.H. VENKATACHALAM
GENERAL SECRETARY Mobile No.: 98400 89920
ALL INDIA BANK EMPLOYEES’ ASSOCIATION
Central Office: “ PRABHAT NIVAS ”
Singapore Plaza, 164, Linghi Chetty Street, Chennai-600001
Phone: 2535 1522, 6543 1566 Fax: 4500 2191, 2535 8853
e mail ~ chv.aibea@gmail.com & aibea@vsnl.com