“Big banks do not necessarily mean strong banks," said C.H. Venkatachalam, general secretary of All India Bank Employees Association, which is opposed to the government’s decision. The other unions are the All India Bank Officers’ Confederation, National Confederation of Bank Employees, All India Bank Officers’ Association, Bank Employees Federation of India, Indian National Bank Employees’ Federation, Indian National Bank Officers’ Congress, National Organisation of Bank Workers and National Organisation of Bank Officers.
The options available to the unions include calling for bank strikes and asking affiliated employees to refrain from work, said Venkatachalam. They may also submit a list of their demands to the government outlining their concerns about the mergers. However, a final agenda will be decided only after the meeting in the national capital, added Venkatachalam.
The Hindustan Times reported on Sunday that the Bharatiya Mazdoor Sangh (BMS), the labour wing of the RSS, has also criticized the bank merger plan, saying it was done without any study and it will only protect the interests of corporate houses.
Meanwhile, the anchor banks—Punjab National Bank, Union Bank of India, Canara Bank and Indian Bank—have already started the ground work for the consolidation exercise, starting with board meetings to consider the proposal.
The boards of the smaller banks will also meet soon, according to regulatory filings. In the case of Dena Bank and Vijaya Bank’s merger with Bank of Baroda announced last September, the boards of the three state-run banks ratified the merger within one month. Finally, the share swap ratio was announced in January and the merger effective since 1 April.
Venkatachalam said these board meetings are just formalities and the ratified proposals will then be forwarded to the Reserve Bank of India and the Parliament for final approvals.
Meanwhile, one of the state-run lenders has tried to assuage employee concerns by ruling out job losses and closures of branches. Padmaja Chunduru, MD and CEO, Indian Bank said in a statement on Sunday that the merger of Indian Bank and Allahabad Bank will create a robust amalgamated entity with a pan-India presence. “Currently, Indian Bank has a strong presence in South India whereas Allahabad Bank is present in northern and eastern India," Chundru said. However, in PSU bank mergers, some employees are given the option of taking voluntary retirement. Around 260 employees from Dena Bank chose to retire instead of joining Bank of Baroda.
In April 2017, SBI merged five of its subsidiaries with itself. The process, which made SBI one of the world’s top 50 large banks in terms of assets, saw 4,000 employees from SBI and associate banks, opt for voluntary retirement.