A bank opens new account

Aman Sood in Patiala

You’d easily say banks make money, they don’t make history. After all, what of history; it holds no value to money, capital’s prime interest. Yet, there are people with the primary task of monitoring your money who can make history. What would you say of a bank that, over the last 99 years of its existence, has come to represent a place, a country’s history and is worth Rs 1 lakh 90,000 crore! Its regional head office (covering Chandigarh, Punjab, Haryana, Himachal and J&K) has 5,000-plus men and women who’d vouch for your money. This is State Bank of Patiala (SBP), headquartered in Punjab’s historical town, Patiala. 

A few months from now, the bank will have been 100 years old. That is not to be. The State Bank of India (SBI) is set to take it over from April 1. The SBP will cease to exist, helping in the birth of the country’s largest bank, the SBI, promising to live its vision of “Blending Modernity with Tradition.” The SBI is the first public sector bank in the country to fully network all its branches. 

Post-merger arrangements have been made. The employees as well as city residents talk about SBP, not as a has-been but as a living entity that grew with them. Here’s what’s at stake: 

Historical significance 

SBP’s rich heritage dates back to the year 1917. It was founded by Bhupinder Singh, the maharaja of the erstwhile Patiala state, with one branch at ‘Chowk Fort, Patiala. It was in 1913 when Daya Krishan was appointed foreign secretary by Maharaja Bhupinder Singh, and both felt the need to set up a bank as an autonomous body to be fully owned by the state and run commercially. 

Later Rs 5 lakh were contributed by the state and Saligram Hoon was appointed as the first manager. Thus, the first branch came up at Chowk Fort, near Qila Mubarak, on Nov 17, 1917, a Diwali day. No other bank was allowed by the Patiala state to operate within the principality. 

Originally, it was ‘Patiala State Bank. Its explicit purpose was to foster growth of agriculture, trade and industry. Its constitution, scope and operations underwent a sea change with the formation of the Patiala and East Punjab States Union (PEPSU) in 1948. The bank was then reorganized and brought under the control of Reserve Bank of India. It was christened as the Bank of Patiala.

The grand merger 

The aim is: Create a banking behemoth, with one-fourth of the market share in the banking sector (in terms of loans and deposits) and has an asset base of about Rs 40 lakh crore (currently Rs 23 lakh crore). The Centre cleared the merger of five associate banks, which will make the SBI among top 50 banks in the world. SBI is India’s largest bank with assets of Rs 30.72 lakh crore and figures at No. 64 in the global ranking of banks (as of December 2015; 2016 ranking is awaited). 

SBP customers will shift to the SBI from April 1. To avoid overlapping offices in the same area, the SBI has decided to shut almost half the offices of these banks, including the head offices of three of them. This process will start from April 24. The SBI will retain only two of these head offices. Three head offices of the associate banks will be unbound along with 27 zonal offices, 81 regional offices and 11 network offices of the associate banks.

The five associate banks that will merge with SBI are: SBP, SBBJ (State Bank of Bikaner and Jaipur), SBM (State Bank of Mysore), SBT (State Bank of Travancore), and SBH (State Bank of Hyderabad).

The five associate banks will cease to exist as legal entities and become a part of SBI. However, the merger processes will start only after April 24, once the balance sheets of the five entities are audited.

The interregnum

General manager (planning, priority sector and new business) Jagir Singh Jandu says the employees understand that the future of the bank is in safe hands. “As far as customers are concerned, other than the fact that some branches will be merged or shut, the they will not face any inconvenience,” says Jandu, who joined the SBP in 1978. 

For Patiala, it will be a big loss as apart from the prestige of the name, the people are used to the head office of the bank in Patiala. Over 500 officers are set to shift from the city. "Some officers at a particular level will be shifted, but there is an understanding reached with SBI that these officers will continue to serve under the Chandigarh division,”Jandu said.