SBI associate banks to offer VRS before merger: Report

NATION's largest lender State Bank of India (SBI) associate banks have begun preparations to unveil voluntary retirement schemes (VRS) for their employees before the proposed merger with the parent bank. State Bank of Hyderabad (SBH) board has approved the VRS and other associate banks will place the scheme before their boards in the next few days, senior SBI group officials were quoted as telling a national daily. The VRS in associate banks would help...
SBI check in staff cost escalation post merger.
SBI’s staff expense was Rs 6,853 crore in the September quarter, rising 11.6 percent year-on-year, the paper added.
SBI’s pension obligation is estimated to be around Rs 3,500 crore. This would grow once associate bank employees come under SBI fold. SBI has nearly 2.02 lakh employees while its associate banks have a total strength of 70,000.
State Bank of Hyderabad, the largest among all the five associate banks, has around 18,000 staff in its roll.
State Bank of Patiala has 15,000 staff. The details of VRS are not available as of now.
The paper quoted SBI sources as saying that all associate bank employees opting for it would get similar benefits. A good number of them are likely to go for VRS as there has been apprehensions across levels about their pecking order under the State Bank of India.
Some senior officials have also raised voices against the proposed merger. State Bank of Travancore chief general manager S Adikesavan has been transferred to Hyderabad for reportedly questioning the merger process.
The government approved the merger in August while the exercise is likely to be over by March 2017. The integration of IT platform -- a key aspect to SBI’s merger with associate banks State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore – is in the final stages.
The lender will try to complete the process by March next, making it the 45th largest lender globally in terms of assets. Earlier in September, the central board of SBI had given its stamp of approval for the acquisition of all the five associate banks and Bharatiya Mahila Bank and finalised the swap ratios for the merger.
SBI chairman Arundhati Bhattacharya earlier expressed the hope that the bank will be able to finish the merger process by end of the current financial year if everything goes smoothly. "The intention is to complete the merger by March 2017,"
With merger of all the five associates and BMBL, SBI will become a global-sized bank and could compete and will be the 45th largest in the world with an asset of Rs 37 trillion. The combined entity will have 22,500 branches and 58,000 ATMs serving over 50 crore customers. SBI has now close to 16,500 branches, including 191 foreign offices spread across 36 countries. SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged.