State Bank of India board has decided to submit a proposal to the Centre seeking an "in-principle approval" to initiate negotiations with its five associate banks, a spokesperson said.
Move immediately drew announcement of a nationwide strike in the five banks on Friday by the All Indian Bank Employees Association (AIBEA) to protest against what it termed the banks' "forceful closure and takeover" by SBI.
Board of directors discussed the possibility of acquiring State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore and their assets and liabilities. They also discussed the possibility of acquiring India's first bank targeted to women - the Bhartiya Mahila Bank.
Though the spokespersonpointed out that discussions were "purely exploratory at this stage and not certain," the move evoked a strong reaction as staff unions of the five associate banks and AIBEA, who have long opposed it.
"The SBI management's arrogant and high-handed approach has forced this all-India strike. Employees of the associate bank and other public sector banks express their anger and protest over this act of SBI. More agitations will follow," said AIBEA vice president Vishwas Utagi.
He claimed that the boards of the five associate banks met urgently in Mumbai"to discuss some agenda that have been purported to have been decided earlier".
"However, without any prior intimation or notice, a table agenda was brought in the board meeting at the dictates of SBI to close down the associate banks and acquire them," he alleged.
Proposal was opposed by the AIBEA's workman directors and some other independent directors of the associate banks.
Even after their dissent and disapproval over the agenda on the proposal and "the dubious methods" adopted in placing such serious agenda for discussion, a resolution was approved to enable SBI acquire the assets and liabilities of the associate banks, the AIBEA said.
Utagi said the SBI move and the associate banks' forcible decisions today are contrary to the views and suggestion of Union Finance Minister Arun Jaitley conveyed to the AIBEA delegation at their meeting on March 23 and April 25.
"His view and opinion was that all the five associate banks can be cross-merged into one single entity. We are questioning whether SBI can force the associate banks to take a decision to merge with SBI ignoring the FM's opinion? How can the SBI decide opposite to what the FM had suggested," he asked.