SBI associates' staff will not be affected by merger: FM

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26 Aug, 2025 12:21

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Interest of the employees of five associate banks will be protected following their merger with the parent entity State Bank of India, Finance Minister Arun Jaitley said today.

The central government has sanctioned the proposal of SBI to enter into negotiations with its subsidiary banks as well as Bhartiya Mahila Bank for acquiring them including their liabilities, he said in a written reply to the Lok Sabha.

The proposal for acquisition has been originated by respective boards, he added.

"SBI has informed that the interest of the employees of the subsidiary banks will not be affected. The pay and allowances offered to employees or officers of the merging banks will not be less than the overall pay and allowances as they would have drawn in the merging banks," he said.

SBI has five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.

In another reply, Jaitley said, gross non-performing assets (GNPAs) to the total advances of the PSU banks as on March, 2016 were Rs 4.76 crore (9.32 percent).

The macro stress tests in the Financial Stability Report of RBI, June 2016 suggest that under the baseline scenario, the GNPAs for the public sector banks (PSBs) may rise to 10.10 percent by March 2017, he said.

However, this level may not be reached in view of the recovery efforts by banks and steps taken by government and the Reserve Bank, Jaitley said.

As per the data received from PSBs, he said, frauds constituted 7.15 percent of total GNPs as on March 2016.

In a separate reply, Minister of state for Finance Santosh Kumar Gangwar said out of 27 public sector banks, 14 have posted losses.

The main reason for such losses was Asset Quality Review (AQR) exercise initiative by RBI during 2015-16 due to which banks had to suddenly make provision for accounts categorised as NPA.

During 2015-16 public sector banks made recoveries of Rs 39,534 crore as compared to Rs 41,236 crore in the previous fiscal.

Replying to another question, Gangwar said the ministry is considering a proposal of LIC for approval of five-day working week for its employees.