State Bank of Travancore (SBT), one of the five associate banks of State Bank of India which is merging with the parent, has shunted out a senior official for reportedly questioning the fairness of the merger scheme.
SBT chief general manager, S Adikesavan, who was the negotiator, was transferred to SBI’s Hyderabad office by the management, leading to protests by SBT employees and Kerala Chief Minister Pinarayi Vijayan shooting off a letter to Prime Minister Narendra Modi seeking his intervention.
SBT was virtually bulldozed into the merger plan without following the due process, claimed an official.
“I opposed the merger procedure as it was done without following the due formalities. There was no discussion or negotiation between SBT and SBI for the merger. It was virtually steamrolled … all the decisions were taken by the SBI and the proposal was just put across. As the chairman of the SBT’s audit committee, I cannot agree to this kind of merger,” said Sajan Peter, IAS (retd), independent director on the SBT board.
“The transfer of Adikesavan, who is a competent officer, is not an ordinary decision. Obviously it has to be for the involvement in the merger. I have noted objections to the way the merger is being conducted in the minutes,” Peter, who retired as additional chief secretary to the Kerala government, told The Indian Express.
Clause 9 of the Scheme of the Merger has clearly mentioned about the negotiations.
When contacted, the SBI management, including the chairman, did not respond to the queries of The Indian Express.
The boards of all associate banks, including SBT which is listed on the stock exchanges, were held in Mumbai on August 18. The merger proposal was just handed over to them without any discussion on the terms and conditions like swap ratio, bank sources claimed. The merger is likely to lead to the closure of 200 branches of SBT, said an SBI source.
Sources said Adikesavan told the audit committee there was no negotiation with SBI on the merger. Adikesavan wrote a note to the management on August 16 stating that due process should be followed and employees and customers should be taken into confidence.
“However, the SBI management was stage managing all the decisions on their own and asked SBT officials to put their signature. They have not taken into account the sentiments of people, customers and the Kerala government,” said State Bank of Travancore Employees Union general secretary KS Krishna.
In his letter to the Prime Minister the Kerala Chief Minister said the government should take suitable action as the decision to transfer Adikesavan to SBI’s Hyderabad office was an act of vengeance, that too before the merger could be completed.
“The stand of people in Kerala and the government is that there should not be a merger of SBT with SBI. Kerala Assembly also adopted this stand. As this is considered as a vengeful act, Prime Minister should intervene to ensure justice,” Vijayan said.
The Kerala Legislative Assembly had recently passed a resolution against the merger of SBT with SBI, stating it would adversely affect the state’s economic growth. The resolution, introduced by the Chief Minister, sought rescinding of the decision to amalgamate SBT with SBI by the Centre and the Reserve Bank of India.
While the lone Bharatiya Janata Party member in the House, O Rajagopal, opposed the resolution, saying it was with a political motive, Opposition UDF and the ruling LDF supported the resolution.
On August 18, the central board of State Bank of India had approved the schemes of acquisition of the State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP), State Bank of Hyderabad (SBH) and Bharatiya Mahila Bank Limited (BMBL).
As per the merger proposal, SBBJ shareholders will get 28 shares of SBI (Rs 1 each) for every 10 shares (Rs 10 each).
Similarly, SBM and SBT shareholders will get 22 shares of SBI for every 10 shares. In the case of Bharatiya Mahila Bank, 4,42,31,510 shares of SBI will be swapped for every 100 crore of Rs 10 each.
Last month, the Union Cabinet had cleared merger of all the five associate banks of SBI with the parent and acquisition of BMBL. As on March 31, 2016, SBT has deposits of over Rs 101,000 crore and advances of over Rs 67,000 crore. The bank has 1,177 branches and 14,892 employees.
Meanwhile, CPI(M) veteran VS Achuthanandan has demanded that the transfer should be reviewed and the CGM should be reinstated in Thiruvananthapuram. The merger process should be completed only through proper procedure and discussions with employees, he said.