SBI-SBT merger: Why Kerala is opposing it?
- The state government had submitted an affidavit in the Kerala High Court opposing the merger of SBT with SBI, terming it unconstitutional, imprudent and unwarranted.
- Kerala Assembly had passed a resolution against the merger as well.
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The Union Cabinet on Wednesday approved the merger of five subsidiaries including Kerala-based State Bank of Travancore (SBT) with State Bank of India (SBI) despite strong objections raised by Kerala government and bank employees. As per the terms of the merger, the shareholders of the SBT will get 22 shares of SBI for every ten shares.
The state government had submitted an affidavit in the Kerala High Court opposing the merger of SBT with SBI, terming it unconstitutional, imprudent and unwarranted. Kerala Assembly had passed a resolution against the merger as well. The resolution was unanimous, except the lone BJP member O Rajagopal opposing it alleging it 'politically motivated.'
The legislators raised their voice to protect the regional identity of 'Kerala's mother bank' and opposed the merger. Now, with the Union cabinet giving a go ahead, the bank employees are stepping up their protests with the support of various political parties.
Apprehensions raised by Kerala government and bank employees. :
- 204 SBT branches in Kerala and 59 in Tamil Nadu will be closed down. There is no decision yet on how and where the employees of these branches would be accommodated.
- Closure of SBT branches would negatively impact state government's transactions.
- SBT, the oldest bank in Kerala, shares an emotional bond with people of Kerala. Its merger might affect investments and NRI deposits.
- SBT plays a significant role in Kerala as 90% of the remittances received by SBT is spent within Kerala by way of loans.
- Merger with the SBI would destroy the regional character of the SBT.
- The SBT has 1180 branches in India and abroad and 14,000 employees.
- The employees fear that the merger would result in the closure of 30% of its branches.
