Post Merger Around 4,000 staffers had taken Voluntary Retirement Scheme VRS

SBI MERGER VRS

Dinesh Kumar Khara, managing director, State Bank of India (SBI), said that the bank had engaged with the subsidiaries with the help of an internet site wherein they were allowed to share any of their concerns. And those concerns were addressed. In an interview with The Indian Express, he discusses the merger of five associate banks with SBI and the future plans for other subsidiaries. Edited excerpts:

What’s your view on reports that employees are not happy with the merger of five associate banks with SBI and their career prospects?

I don’t think so. Up to scale 3, there were no sacrifices. That takes care of 80 per cent of staffers. They have got nothing to lose. When it comes to scale 4 and 5, the sacrifice was one year. For scale 6 and above, the sacrifice was two years. A two-year sacrifice means they have to wait for up to two years for promotions. The main bank had engaged with all of them with the help of an internet site wherein they were allowed to share any of their concerns. And those concerns were addressed.

Where were 73,000 employees of associate banks deployed? How many had taken Voluntary Retirement Scheme (VRS) out of 12,500 eligible for the scheme?

We were transparent. People from associate banks have been posted in the corporate centre, corporate banking group and national banking…people were posted in subsidiaries also. Those who don’t have a skill set and those who need to work on it might have felt…in any such process, you will find such people. They will have a reason to complaint. Around 4,000 staffers had taken Voluntary Retirement Scheme.

What has been the experience of the merger of associate banks with SBI?

Challenges are more in terms of technology and culture. When the merger happens, both the entities are going concerns. You have to integrate while they are going concerns. There are complexities when it comes to IT (information technology) systems.

Has the overall asset quality of the bank been hit with the merger of the associate banks?

Post-merger, they have all gone to the other verticals of the bank like the national banking group or the corporate banking group. They are in the process of rationalisation of branches and administrative offices. Corporate book is all accounted for and provisions were made. As much as 80 per cent of the corporate books are common between the associate banks and SBI. But retail is fragmented. So, there was no way for us to take a uniform approach.

 

What’s your strategy for subsidiaries, considering the bank’s subsidiaries are active in all segments?

As far as subsidiaries are concerned, we would like them to be in line with the status of the banking sector. They should be in the top rung only. They are now in a decent growth path and they are all well-positioned.

Will the cards subsidiary go public like some of the other subsidiaries of the bank?

SBI has five million cards now. We are planning merger of two subsidiaries (GE Capital Business Processes Management Services Ltd and SBI Cards and Payment Services Pvt Ltd) in 2018-19. The IPO might come in 2019-20. But, much of it will depend on the prevailing market conditions.

What about the asset management arm? Is there any plan to buy out UTI Mutual Fund?

There’s no concrete talk of any plan on the listing front. It will depend on the JV (joint venture) partner. We have over 18 per cent stake in UTI Mutual Fund. We have never really thought about it (buying out the entire stake). SBI Mutual Fund is a joint venture between SBI and Amundi of France, one of the world’s leading fund management companies.

Source: The Indian Express

 

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