SBI may lose monopoly on govt salaries

Even as strike by the State Bank of India (SBI) employees entered its fourth day, sources indicated that the bank's near-monopoly on disbursement of government salaries may be watered down to allow other public sector banks like PNB to do the job.

The proposal could mean a significant change for SBI, which has a monopoly over government business. Although the idea is not new, it resurfaces at a time when the strike caused the government to disburse March salaries a day before the due date.

"We are considering involving other banks in salary distribution," a government official told Business Standard.

The proposal had been mooted on earlier occasions but failed to take off as other banks did not have the requisite infrastructure, including the currency chest.

"More than 90 per cent salary work of the government is done through SBI. Such proposals had been mooted earlier also but not much was achieved," a senior official of the Association of State Bank of India Officers Federation said.

In the North-east, United Commercial and ICICI banks disburse salaries in a few areas where SBI is not present.

PNB, which is the second largest public sector bank after SBI, does not do any salary work for the government.

"We have not received any proposal to take up salary work due to strike by the SBI employees," SC Gupta, chairman and managing director of PNB said.

On being asked if the bank would be able to handle such a large amount of work, Gupta said no bank would refuse more business, including salary distribution.

For March, the government was able to pay salary to its employees on the last day of the month. In an understanding with the government, the SBI staff worked on Saturday and Sunday to clear the salaries.