: Mega Bank mergers: FinMin moves to ensure smooth HR transition
The mega bank merger plan to
consolidate as many as 10 public sector banks into four large entities may not
face post merger Human Resources (HR)-related problems if the Finance Ministry
has its way.
To smoothen the integration and address HR-related matters flagged by
employees as well as their associations/unions, the Finance Ministry has
directed the concerned banks to constitute a joint committee of Executive
Directors in charge of HR to look into the issues concerned. The joint
committee has to be constituted with the approval of the respective boards,
said the Department of Financial Services in the Finance Ministry.
The committee has been tasked to submit appropriate recommendations to the
top management and/or the bank’s board or relevant committee of the board,
official sources said.
Recently, Finance Secretary Rajiv
Kumar had indicated that the Finance Ministry was positive about the formation
of a committee comprising all concerned to look into the issues raised by
employee unions. Following this, four bank officers’ associations had deferred
their strike call for September 25-27.
It may be recalled that Finance Minister Nirmala Sitharaman had, in
August-end, announced the mega bank merger plan as part of overall efforts to
have financially-stronger public sector banks that could support a $5-trillion
economy by 2023. From a level of 27 PSBs in 2017, the number of such banks
after the latest consolidation drive is proposed to be brought down to 12.
Amalgamations have not been new – Vijaya Bank and Dena Bank merged with
Bank of Baroda and State Bank of India took into its fold its subsidiary banks.
However, the HR situation at the ground level has not been very smooth.
Even six months after the amalgamation came into force in April 1, there
are integration issues at the officers’ level in the case of erstwhile Vijaya
Bank and Dena Bank, sources said.
There has to be acceptance of both Vijaya Bank and Dena Bank officials
within the ranks of Bank of Baroda that they are all now part of the same
organisation, and the officers of the smaller banks should not be treated as
second-grade citizens. Things may be fine at the top, one can’t say the same at
the ground level functioning. What happened in the merger of PNB and New Bank
of India is now happening in the case of Bank of Baroda, a banking industry
In the case of SBI, the HR integration problem is severe with many in
State Bank considering the employees of their erstwhile subsidiary banks as
Banking industry observers reckon the HR integration challenge will last
at least for five years, even though the employees involved are only from the