Bank Mergers

Bank Mergers are vital from the point of view of strengthening banks and their balace sheets.Indian banks are yet to grow to become banks of global size.Mergers of banks will benefit all stake holders.Leveraging union powerto get better compensation would serve the employees'better than opposing merger of banks.Unions generally indiscriminately oppose new initiatives.In 1995-96 before the dead-line fixed for submitting one's option on pension the unions of PSBswent round pressurising staff not to opt for pension as the benefit thereunder would be much less than PF benefit.Most of the younger staff who going by the advice of Unions did not opt for pension are now suffering for want of pension.

Executives,officers and staffin new private banks are now getting more salary and incentive than the staff of PSBs.Instead of opposing merger of banks ,particularly associate banks of SBI group with SBIthe employees must welcome the merger to derive economies of scale.A giant SBI that is going to be created following merger can be a global player.The capacity to pay of such a giant bank will be enhanced.Bank mergers have advantages such as economies of scale,enhanced public image,better size required for amassing volumes of business,cost cutting through elimination of duplications and enhanced financial strengthand stronger balance sheet.

[Source-Business Line 3rd Jan 2008]