SBT-SBI merger: Kerala HC issues notice to finance ministry, RBI1 min read . Updated: 30 Aug 2016, 11:05 PM IST
A bank working on profit for the past 70 years was all of a sudden showed as making loss, says the petition against merger of State Bank of Travancore with SBI
Kochi: The Kerala high court on Tuesday issued notice to the Union finance ministry, the Reserve Bank of India (RBI), State Bank of India (SBI), State Bank of Travancore (SBT) and the state government on a petition filed against the move to acquire SBT by SBI.
A division bench comprising acting chief justice Mohan M. Shantanagoudar and justice K.T. Sankaran issued the notices after admitting the plea filed by the petitioners, including ‘Save SBT Forum’ and others.
“Suspiciously, a bank working on profit for the past 70 years was all of a sudden showed as making loss by charging higher rate of provision on standard, sub-standard and non-performing assets," the petition said. “Without placing the subject matter of acquisition in the board meeting with prior circulation of the details to the directors, they have placed it as a ‘table item’ and initiated steps for acquisition, against the opposition of the directors representing the stakeholders and employees," it said.
It was done with a view to strengthening SBI India, the petitioners submitted. Similarly, the SBI’s board of directors against the wishes of the various stakeholders decided to continue the steps for acquisition, the petition said.
It said that the state assembly passed an unanimous resolution protesting the step for acquisition. Petitions and representations were made to the centre, RBI and SBI, it said.
The Save SBT Forum includes political parties and central trade unions. According to the plea, the petitioners apprehended that huge money available with the SBT will be diverted by State Bank of India for advancing loans for multinationals and corporate institutions, without investing it in the state from where funds are procured.
The petition said, “The state government has got heavy interest in the running of State Bank of Travancore as all the major business in the state is carried out by the bank established by Maharaja of Travancore in 1945 and thereafter nationalised."
The petitioners said the total business of the SBT, an associate bank of SBI, stood at ₹ 1,68,123 crore as on 31 March this year. The bank grew by 31.06% in 2015-2016, it added.