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March 21, 2017

SBI will Shut down 47% of its Associate Banks

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India's largest lender, the State Bank of India (SBI), which is going to merge with its 5 associate banks, has decided to shut down almost half of the offices of these banks (47%), including the head offices of three of them. This process will start from 24th April 2017. The five associate banks will cease to exist as legal entities and become a part of SBI from 1st April 2016.

"Out of the five head offices of the associate banks, we will retain only two. Three head offices of the associate banks will be unbound along with 27 zonal offices, 81 regional offices and 11 network offices of the associate banks," SBI Managing Director Dinesh Kumar Khara has announced today in an interview. 

The shut-down move is to avoid overlapping offices in the same area and “we intend to remove any kind of duplicacy in the controlling structure”, Khara said. 

Employees directly affected by these shutdowns — estimated at 1,107 — will be redeployed, mostly in customer-interface operations, Khara said. The associate banks have also offered a Voluntary Retirement Scheme (VRS) to employees who do not wish to relocate.

There are currently 550 SBI offices while its associate banks have 259. The target for the number of controlling offices after the merger is 687 — a reduction of 122 offices.
The five associate banks that will merge with SBI are : SBBJ (State Bank of Bikaner and Jaipur), SBM (State Bank of Mysore), SBT (State Bank of Travancore), SBP (State Bank of Patiala) and SBH (State Bank of Hyderabad).

Notably, the government has cleared the merger of Bharatiya Mahila Bank (BMB) with SBI today.
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