SBI To Relocate 1,800 Branches Following Merger With Associates
SBI will put hiring plans on hold to absorb staff from associate banks.
State Bank of India (SBI) will undertake a massive branch relocation exercise after the merger of the parent bank with its five associate banks. The merger will become formal on April 1, following which all branches of the associate banks would function under the SBI brand.
To resolve any overlaps that may exist, SBI plans to move branches to areas where it may not have coverage rather than close them down and give up the branch licences, Arundhati Bhattacharya, chairman of State Bank of India told BloombergQuint in an interview on Tuesday.
“At this time, we are not considering outright closure of branches. What we are considering is relocation of the branches,” Bhattacharya said. In all, around 1,800 branches will be relocated in a span of three years, she said.
Post the merger, SBI will have more than 22,000 branches across the country.
As you know, we are a legacy bank and we have branches in the old parts of town. So we may choose to close down some of those branches, either of SBI or the associate banks, and relocate to those parts where we are not present.Arundhati Bhattacharya, Chairman, SBI
The bank will, however, close down other functions where there may be duplication post the merger. This includes corporate treasuries of the associate banks, which would be merged into SBI’s treasury. Mid corporate branches will also be shut down because those functions can be immediately merged, said Bhattacharya.
The merger will also take a toll on the bank’s hiring plans, although Bhattacharya said that she doesn’t need significant rationalisation of staff. Some of the required rationalisation would come through natural attrition and voluntary retirement schemes (VRS) being offered by the associate banks in the lead up to the merger.
“We are seeing attrition of about 13,000 people a year across the group. So if 13,000 go away and another 3,000-4,000 go away because of the VRS, then overall we are okay within a period of 12 months. We won’t need to do any much rationalisation,” said Bhattacharya while declining to share details on how many people have opted for the VRS at the associate banks.
The bank, however, may put its hiring plans on hold for the current year as a result of the merger. The bank recruits about once in two years. This includes hiring of about 2,000 probationary officers, who go on to perform core banking functions. In addition, the bank hires anywhere between 5,000-12,000 clerical staff. “This year, we may not recruit,” said Bhattacharya.
When asked whether the bank would offer a VRS at the parent bank as well, Bhattacharya said that no such plan is in the offing immediately.