Ball in govt’s court, says SBI chief

Yash Goyal

Jaipur, June 7

Viewing tough competition and technological changes in the banking industry, SBI Chairperson Arundhati Bhattacharya today said if the Central government approved a proposal of consolidation, five associate banks of the SBI Group would be merged into SBI in one go within 2-3 months.

She said five associate banks, including State Bank of Bikaner & Jaipur, State Bank of Tranvancore, State Bank of Mysore, State Bank of Hyderabad and State Bank of Patiala, are very small in the era of tough competition with big banks as it was difficult to keep enough capital and face repetitive cost of products that a united bank could afford and provide to the customers. She was talking to media after attending the AGM of SBBJ.

SBI had sent a proposal to the Centre to approve in-principle the merger of five associate banks with it, she said. “Once we get the approval of consolidation, we will meet the unions,” she said.

Justifying the move, she said: “In the absence of merger of banks, first we have to bring products to SBI, and then carry to five associate banks. It takes time and money for introducing any change.”

On staff shortage, she said, SBI was conducting a massive recruitment drive besides increasing service channels to educate customers to opt for internet and mobile banking. She said SBI would have a Technology Products Platform for all customers if the merger takes place.

When asked whether she was confident of the approval, she said, “I am not sure. How could I be sure? The government has to take a decision.”

SBI has created a separate unit titled “SBI Foundation” to carry out its CSR initiatives and it would be operational soon. On RBI Governor’s criticism for following hawkish monetary policy and persuading banks to transmit the benefit of rate cut to customers, she said, “The pressure of NPAs is too much and the economy is not moving fast. The banks’ profitability is in stress today and it is very difficult to reduce the interest rate to benefit borrowers when profitability is in stress.”