As the first step to the proposed integration of the forex and treasury departments of the State Bank of India, the chief dealer in the foreign exchange wing of the bank in Calcutta, G Padmanabhan, has been transferred to Mumbai as an assistant general manager.
The proposed integration would be in line with the Mckinsey report on restructuring of SBIs operations.
The SBI staff and broker firms of Calcutta are strongly opposed to the move. They say that the shifting of operations of the forex department will mean a huge waste of effort and investment.
They point out that under a vastly improved communication system, centralisation is hardly a problem even when operation centres are spread out.
Our Banking Bureau, Mumbai adds: The decision to shift the forex department was taken during the tenure of former SBI chairman P G Kakodkar. But the move was hanging fire because of stiff resistance from the banks unions. SBI had to merge its domestic and foreign treasury operations to leverage opportunities in the money and forex markets.
With the integration, SBI, which is a major market mover, will benefit from its own decisions. For instance, if the bank purchases a huge amount of dollars, it will release a chunk of rupees into the banking system. On this cue, the money market cell of SBI can take a position and lend before the dollar purchase. SBI officials feel that with the emphasis now on increasing shareholder value, one cannot split the forex and treasury cells for sentimental reasons.
