We present here a recent circular that we have received from AIBOC:

All India Bank Officers' Confederation (AIBOC) condemns and opposes any move of the Government to privatise and/or Merge Public Sector Banks. The Role played by the Public Sector Banks in Nation Building has always been highlighted, appreciated and applauded by all Governments of the times. But simultaneous and strategic propaganda initiated by and through various Institutions, Authorities and Controllers creates doubts in the minds of common man with regard to real intentions of the Government/Regulators, who were seen as promoting the interest of foreign powers and capitalists. AIBOC has been representing its views through various correspondence and personal representations to all authorities and even suggested various alternatives/solutions to the concerns aired and steps taken by the Government through press releases and statements. Our Serious suggestions of Alternative Commissions on Financial Reforms and Alternate Gyan Sangam were not even looked into, leave apart discussions on that.

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Clearly , this is a forced merger by the government, which is pushing for consolidation in the public sector banking space.

The current chief of SBI, Mrs. Arundhati Bhattacharya said this in August last year, "I don't think this is the right time. Because today there are a lot of challenges and those challenges are more immediate than merging banks. The conversion to digital that is happening at such a fast pace, that's a very big challenge. The fact that we have so many other layers coming in like payments banks, universal banks, licence on tap, disintermediation happening through the crowd funding platforms, crypto currency popping up here and there, so, challenges are multi-fold today. Even if I merge them, my balance sheet will not go up, the group balance sheet remains the same. And therefore, the valuation I get will remain almost the same. Only thing that will happen is, I can bring about greater efficiency. But I can do that even without merging."

Moreover, a director of one of the associate banks (ABs), who attended his bank's board meeting on May 17, said, “The manner in which the merger is being attempted, just bringing it in as a table item at the board meeting and without discussing what is in it for all the stakeholders, it is not the right thing to do. How can you expect the directors to apply their minds when suddenly such an important issue is brought to the board? First of all, they should have circulated background papers on the advantages/ disadvantages of merger, the economies of scale that could be derived, etc. All these should have been presented in black and white."

We believe that there would be immediate negative impact from pension liability provisions (due to different employee benefit structures) and harmonisation of accounting policies for bad loans recognition. It is imperative that the Unions work closely with the Banks in order to ensure that the employees of the banks are not impacted.