Bank Unions have deferred their nation-wide strike called to protest the proposed merger of State Bank of Indore with State Bank of India following the advice of the Deputy Chief Labour Commissioner that both the management and unions should discuss and sort issues out.
The decision to defer the strike was reached after a meeting yesterday with the Deputy Chief Labour Commissioner, said the All India Banks' Empolyees Association (AIBEA) General Secretary, C H Venkatachalam.
"We strongly opposed the closure of any of Associate Banks and their merger with SBI," he added.
After hearing both sides, Venkatachalam said, the Deputy Chief Commissioner felt that in such a complex issue like merger, both the parties should sit across the table and hold meaningful discussions to find an acceptable solution.
Accordingly, the managements of SBI and State Bank of Indore were asked to invite the union for discussion, he added.
The Deputy Chief Labour Commissioner further advised them not to pursue the merger issue with the RBI and th government, Venkatachalam said.
Other associations which were part of the meeting included NCBE, AIBOA, BEFI and INBOC. At the same time representatives of Indian Banks' Association, SBI, State Bank of Indore, and other associates were present from the management side.
The management has been further advised not to take any action that may vitiate the cordial relations, Venkatachalam said.
The SBI and State Bank of Indore management agreed to invite the union for discussion on the issue of merger to find an acceptable solution, he added.
On June 19, SBI announced its plans to merge State Bank of Indore with itself, a development that would reduce the number of its associate banks to five.
The decision came a couple of weeks after Finance Minister Pranab Mukherjee asked public sector banks to look at consolidation as a serious option in order to reduce risks to financial stability and face competition.
The proposal for the acquisition of State Bank of Indore by the SBI will be subject to approval by RBI and the government.
SBI holds 98 per cent stake in the State Bank of Indore that posted a net profit of Rs 279 crore in 2008-09. At the same time total business of the bank stood at Rs 49,432 crore with the capital adequacy of 13.4 per cent at the end of March 2009.
SBI had earlier in August 2008 had merged State Bank of Saurashtra with itself.