SBI merger: Hyderabad HC stays absorption

The scheme for absorbing of 30,000 officers of five associate banks initiated by the State Bank of India (SBI) hit a speed bump on Thursday, with the high court in Hyderabad issuing an interim order directing the country’s biggest lender to not act on the options given by these staffers till June 15. The court has been petitioned by the State Bank of Hyderabad and Associate Banks Association. It has challenged the scheme by which options have been sought from the officers to be absorbed.

The Voluntary Retirement Scheme (VRS) offer for employees of State Bank of India’s associate banks, now formally merged with the parent, has had a relatively poor response.

A not-so-good package and a weak job market has held back many who of the 12,500 who were eligible from putting in their papers; only 3,500 have finally opted for it. While 4,300 had applied till the final date of April 5, around 800 of them withdrew applications by April 12, the last day for doing so.

A top SBI official said the response was below (about 50 per cent) expectation but this was not a problem, as those who have stayed back are not a burden. Many have significant experience, handy to manage the merger transition. The bank would be look at skill and experience profile for deciding postings, the official said.

All the five entities — State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore, in addition to Bharatiya Mahila Bank (BMB) — merged with SBI with effect from April 1.

The bank had set some criteria for the VRS. Those opting for it should have over 20 years of service and attained at least 55 years of age.

Two senior executives with the SBI group said the package (maximum 30 months salary) was not seen as attractive. Plus, these are not the best of times to look for a job outside. Also, employees up to the rank of assistant general manager have an opportunity to get placed within the circle (of SBI) he or she works. This helps to increase the chance of being placed at a branch or office which could be a home place or nearby, they said.

A staffer whose VRS application is accepted is to get an amount equal to 50 per cent of the residual period of service, capped at 30 months’ salary. The employee strength of SBI after the merger has increased to 270,011, which includes 69,191 from the associate banks and BMB.