Unions flay SBI stake transfer

The officer and staff unions of the State Bank of India (SBI), the country's largest commercial bank, are working on a joint strategy to oppose the government's decision to acquire the Reserve Bank of India's 59.73 per cent stake in the bank.

The unions will be sending a joint letter to the government next week, outlining their reservations over the stake transfer and threatening an indefinite strike if their plea is ignored.

The unions suspect that the move is a precursor to the government diluting its stake in SBI.

The government is to acquire Reserve Bank's stake in June 2007 in a cash-less transaction, as part of a move to separate the central bank's ownership and regulatory functions.

The move was approved by the Union Cabinet following a recommendation of the Narasimhan Committee on banking reforms.

SBI has around 60,000 officials and 1.5 lakh clerical staff on its rolls. General Secretary G D Nadaf described the stake transfer as the government's "sinister" design to amend the SBI Act and subsequently dilute its stake in the bank.

"There is no need to transfer the RBI stake in SBI to the government fold as it will not serve any purpose," he said, adding, "The move is being made on account of imaginary problems shown by the Narsimhan Committee, which had also proposed massive consolidation among banks."