Any progress and development will be disruptive in nature for the present status quo in the short term and also some major disruptions in HR issues. Especially when the development is associated with some M&A. The major project will always be working on low hanging fruits for the benefit of the population affected before embarking on completing the project or take the project forward. This we can see in most of the road projects in the country where part of the road near the town/village is completed and the people are allowed to use the newly laid road without any user fee for the same. Why all these idle thoughts now about the project, project management or the benefits to the common man when the prologue was about the HR issues?
The impending mega take over or acquisition by State Bank of India (SBI) its own five subsidiaries (legally still only subsidiaries despite they are being referred to as Associates) is the reason for this prologue on a ticklish issue. The need and reason for this mega acquisition (why not call it merger as some would prefer to is a question that is dogging me as well) by SBI is well known and discussed and debated in this forum by eminent bankers and finance professionals apart from the political discussions within and outside the parliament. The mega merger or takeover is starting effective from tomorrow that is 1st April 2017. SBI which is taking over its own subsidiaries and merge them into in its own fold had indicated to RBI that it will be 3 months before the entire process is completed. In the meanwhile, the banks have issued a notification to the employees and officers offering a VRS that may or may not be beneficial to the individual who had put in 20 years of service or attained 55 years of age. The bank expects about 6 to7000 of the eligible staff to opt for VRS thereby reducing the intake of the staff to reduce their hassles of the HR issues that may come up in the immediate future.
In the Banks that are taken over presently, the employees have a bargaining position in that the umbrella organization is an affiliate of the All India Bank Employees Association. The employees of SBI are having a different union and that being a majority the employees even if they opt to continue to have allegiance to the AIBEA will still be a group without any union recognized by the management. How and to what extent the interests of the employees from the Banks that are being taken over will be safe guarded in the absence of the union to which they belong now is a moot question. Some of the employees I chanced upon during the last few days were quite apprehensive about their position to continue in their respective places post-merger.
In the earlier take of two other subsidiary banks by SBI in the last decade, the seniority of officers of the taken over banks were reduced by a formula for different grades and this resulted in some of the very bright officers from these taken over banks remained in the position they were until their retirement, which would not have been the case had the takeover had not happened. Some of them might have moved to the next grade which post-merger did not happen due to their loss of seniority. A similar or the same formula to reduce the seniority of the officers of the taken over banks may result in a few of them languishing in their present position until they retire in a few years hence.
The question of retirees of the taken over banks is another question that everyone seems to relegate to the back burner as if that is of no consequence. There is a lot of difference between the retirement benefits of SBI and that of the subsidiary banks. Just take the pension alone; the SBI there is a cap on the pension and the % is not the same as that of the retirees from subsidiary banks where it is 50% of the average of last 10 months pay (as in government service). In SBI this % is slightly lower as they are paid the bank’s contribution to the provident fund. The retirees from subsidiary banks do not get the banks’ contribution to the PF. The basic pension also does not get refitted whenever the pay and allowances of the serving staff is renegotiated and reworked, though in the pension rules there is a regulation governing such practice. This puts an anomaly in the overall scheme of pension paid to the retirees. An officer who retired a decade back will be getting a lower pension compared to the clerk who retired post 2012 or retiring post 2017 settlement. How these anomalies are going to be addressed by SBI is another question that is a big mystery.
There is a huge corpus of funds with the union of employees and association of officers collected over a period since the union and association came into existence. How these funds are going to be disposed of by the respective union and association is another question that is one more mystery.
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