One Grain Amongst the Storm

The nation today was exposed to the information from nothing less than the Ministry of Information and Broadcasting, or, as they say, straight from the horse’s mouth: “SBI is facing a situation where most of its branches and those of State Bank of Indore are competing for the same business, in the same market, under the same brand. This has prevented SBI from fully exploiting its brand equity for driving business growth”.

Hence, “the Cabinet gave its nod to the merger of State Bank of Indore with SBI. Acquisition of State Bank of Indore by SBI would allow economies of scale in terms of footprint, manpower and other resources.”

Never heard such candid and succinct diagnosis of a ‘situation’ from Oracles of New Delhi before! Remedy advised though failed to impress my weak mind. If internecine competition is indeed a ‘situation’ with the State Bank Group, the mighty wizards have successfully knocked off the tip of the iceberg by merging State Bank of Indore, and State Bank of Saurastra, earlier. What lies beneath, however, is a massive residue of five more State Banks, namely, the Bikaner & Jaipur, Hyderabad, Mysore, Patiala and Travancore. I am sure, by the same token, they may cause discomfort not only to SBI, but among themselves too. Ironically, the group is also facing a shortage of human resources that can be easily pooled for the common cause.

I have long given up writing, nay, thinking, on merger of Associate Banks. But the sudden flash in the pan plucked me long enough from the blinkered drudgery of life to nod my head in approval. It’s kind of reminiscent of Spain’s goal against Netherlands in the 116^th minute of the World Cup final when almost everyone had given up on Paul’s prophecy.

So long folks, till the Octopus catches another associate competing with the SBI!

LIC Housing Finance Ltd is a premier housing finance institution of India. As the name suggests, it’s been promoted by the redoubtable Life Insurance Corporation of India. Without launching a treatise extolling the institution’s virtues, focus today is drawn to a simple fact. LICHFL has no employee unions.

No unions, you say? The management must be having the hapless employees for breakfast, lunch and dinner! Well, here is what the management did recently. The salaries of the LICHFL employees were hiked by 20.8% and the arrears were paid since August 2007!

And what have the bankers, ostentatiously protected by gigantic umbrellas of unions and associations, to flaunt? Bankers, who were the kings of wages before the Pillai Committee cut them to the size of group ‘A’ government officials?  An event, that also proved to be a watershed in the lives of bankers. The trade unions rushed to foist themselves as the self-appointed messiahs of the bank employees and took centre stage in wage negotiations and other vital matters of welfare. They also methodically ushered in the failed policies and visions of their communist masters to the dining table of an average banker. Once seated, these ghosts refused to leave the table, gradually chipping off and reducing the size of the pie that the family could have, day after day, year after year. Thus, participating in countless strikes and agitations instigated by these malicious thugs, bankers have been slipping down a very slippery pole of wages ever since.

The billion dollar question, therefore, is whether we need the services of such ominous bunch of self-appointed leaders, hell bent to reduce us to pygmies, any longer? Its time we set ourselves free of the killing embrace of the Dhritrashtras of the banking industry. History is replete with the records of their failures. Be it the employee welfare issues such as wages, retirement benefits, working conditions of its officials, or the progressive and evolutionary issues like computerization and mergers.

We know the one cent monosyllabic answer to the question in our hearts already.

“The wind is free, but the sand goes where it is blown.

Unaware of the world around it, whirling on the breath of the Gods, at the mercy of the storm that engulfs it.

What is one grain of sand in the desert?

One grain amongst the storm?”

The haunting voice of the narrator in ‘Prince of Persia’ descends softly on the senses. It keeps echoing within the mazes of the brain even when I’m away from the console. Jolted back to life, I keep thinking. What is a blog amidst the sea of babbles on the internet? One squeak of metal amidst a million clanging swords?

A search for “Merger of Associate Banks” fetches 12,80,000 results in Google, 4,86,000 results in Bing. Pages replete with negative verbs, nouns and adjectives. Waiting. Postpones. Hindrance. Opposes. Unions.  Associations. Strikes. Anyone worth his salt feels compelled to expound casually.

There are some positive vibes too. Speculations by the media. Statements by the mandarins perched on high pedestals of governance. Lip service.

I’ve been asked why, at all, do I bother? Merger is inevitable.

Well, it has been so for 50 years or so. And I get to work for probably 30 years in all my life. I have reasons to be worried. Simplistic calculations reveal I will be better paid, compensated and acknowledged in SBI. Post retirement life will definitely be better provided for. It is a personal loss to me. It is a personal loss to thousands of colleagues too. Month after month, people are retiring and going away, never to be included into the common stream of benefits.

It is a loss to the entire State Bank Group too. Its human resource across the unmerged associates is in disquiet.

It is time for that charade called ‘election’ in some Associate Banks. And the scenario got grimmer and murkier this time around. Riding the deep wishes of people for an unconditional merger, self-proclaimed harbingers are eyeing the thrones of power, occupied till date by staunch Anti-merger autocrats. Together, naked in their hunger, they are ready to beguile, tread and crush those who can see through the camouflage.

I refuse to be engulfed.

I refuse to be a grain of sand.

I wish to tell you a tale. A tale that was told to you in your childhood but has assumed a graver significance today. It’s called ‘The Pied Piper of Hamelin’.

Once upon a time there was a prosperous town called Hamelin. The town was suffering a rare menace of rats. There were rats everywhere, in the fields, in the silos, in the streets, in the bakeries, in the shops, in the homes, in the kitchens, and even in the bedrooms. People of the city did everything in their powers but nothing seemed to work against the multiplying rodents.

One day a weird looking stranger with a sliver pipe in his hand paid a visit to Hamelin. He promised deliverance from the rats at certain remuneration. He went to the town square and started playing a haunting tune from his pipe. Rats started pouring out of the fields, silos, streets, shops and homes and out of the every possible hole in the town. They all scurried towards the town square and started dancing around the Piper who then proceeded towards the port of the town. Upon reaching the port he merely dipped his toe into the water but the rats simply scurried to their watery graves.

Unfortunately, the people reneged on their promise and did not pay the Piper his dues in full. Miffed, the piper again appeared on a religious day when the elders were all still in the church. Upon reaching the town square he started playing an ethereal tune that spoke to the children of the lands of toys and fairies. The children skipped whatever they were doing and ran towards the square dancing.  The Piper then moved through the exit gate with the children following him never to return again.

Back to the mundane life where you and I are mere banker-mortals, can you spot an analogy to the Pied Piper whom we follow as if hypnotized, as a matter of routine?

The omnipresent association junta may be one.

With no institutionalized social security in our nation, the only umbrella available to a bank official is the retirement benefits for the days when the hands begin to tremble and the brain begins to fumble. With the lone exception of SBI, one gets either the provident fund or a monthly pension scheme for the rest of life. In the early 1990’s, an option was given to the bank officials by the industry to choose one of the two available paths. The offer was seized by the association to foist an army of impromptu accountants on the hapless officials. These self-proclaimed actuaries forcefully advocated for PF and branded the pension scheme as a “conspiracy of the management”. The incessant coaxing led to the officials ending up with the PF option en masse. Of course, there was the odd official who shut his ears to the beguiling tunes and opted for pension. Today, after a decade and a half or so, when the banking fraternity is convulsing for having the ‘option’ reopened, those who blocked the hypnotism of the Piper have a smile on their faces. They were, without doubt, on the right side of history.

I am greatly indebted to the esteemed visitors of the blog who give me opportunities to come up with newer posts. It has been said that the association is committing yet another blunder by opposing the merger with SBI. Truly so. It’s a blunder of Himalayan proportions. But can we afford to let them succeed in their nefarious designs? Why are we following them like the children who followed the Piper?

At this point, a quick analysis is due to the multilayered Anti-merger music being floated in the air. It is being proclaimed that we will be relegated to second grade citizenship, or worse, even third grade citizenship, in SBI. Our seniority will be capped in pint sized bottles. Further, we will be parked at most difficult stations. Also, we will not be assimilated in a scheme of perks and benefits similar to that of SBI.

Folks, its time for some truth. Are we not already being apportioned the abridged versions of perks and benefits and other welfare related matters? Don’t you think it’s a second class status already? Even in our own organization, is there not a region and sect and recruitment based discrimination already? Which class does it push us to?  Moreover, if the state of discrimination in SBI were to be as bad as prophesied, why hasn’t a single employee of ex-SBS come ahead with the horror stories? Why not then, be a part of SBI and earn similar returns for our blood and sweat?

The law of equality says that all men are equal, however, some are more equal than others! For the sake of sanity, let us assume that promotions are always an objective phenomenon. Come to think of it, there may be a lot of scope for Circle based bias even in SBI! A truly talented and hard working individual will be able break the pint sized bottle, or the glass ceiling, or whatever it is, for that matter.

Similarly, posting the entire staff of associate banks in difficult positions may not be possible for SBI as they may just not have such positions in such huge numbers! On the contrary, an SBI official is normally posted within the home circle till they reach Scale V as opposed to the nationwide shunting in the associate banks.

Lastly, the ex-SBS staff is now entitled to almost all benefits a la SBI except a few minor ones, which again are being worked out and will be given to them at a later stage.

Let us not then, commit the blunder of following the Pied Piper one more time. For all you know, this may prove to be our final call. Be on your guard. Be on the right side of history!

Barely few months after the high tides of mass opposition swept the Junta off their entrenched feet in State Bank of Indore, their counterparts at State Bank of Hyderabad, the largest Associate of SBI, were tossed to nothingness by the Tsunami unleashed by the discerning officers’ community in the triennial elections. So complete was their annihilation that not even the crow that flew across the parapets of SBH stopped to remember them on that fateful day. Ironically enough, these thunderous waves bore a simple name: ‘Panel for Merger’.

As promised, the ‘Panel for Merger’ promptly passed a resolution for merger with SBI on Sepember 06, 2009.

The unfolding of the aforesaid event assumes importance in the wake of impending elections to the office of Officers’ Association being systematically abused in some of the associates. One cannot wax enough about the significant financial, social and personal benefits of merging with SBI, being held to ransom by the pettiness and greed of the incumbent junta. Add to that the Talibanesqe ruthlessness with which these folks crush dissenting voices and you have perfect ingredients of an apocalypse. The very officers who endorsed the vicious regimes as if in a trance time after time, have suddenly become intensely aware of the powers that their votes wield.

Dangerously, however, the junta has also become acutely conscious of these developments. Sensing the end of fear psychoses over the officers community, they have resorted to playing true blue political turncoats. Confident anti-merger snarls are being sugar-coated by false pro-merger promises just to put the unsuspecting denizens off-guard. Please do not forget, these are the same very wolves in sheep’s clothing. And the paths they point to lead to the slaughter house, not the rosary.

Communist ideology is the manna that fuels the trade unions’ fire. Notwithstanding the regional and politico-religious differences, it’s the hammer and the sickle motif that keeps the employee unions and associations going full steam. They get rattled at the faintest hint of reforms which they instinctively take for loss to their collective bargaining power, eroded socio-financial security, closure of industrial units and retrenchment of workers. Their nasty and prolonged opposition to computerisation is a classic case wherein they fought rabid wars with the “management” and the “government” for decades. Imagine where would have we been without the computerisation of the telecom, railways, banks, insurance and other such vital sectors.

Recent maelstroms and strikes in the banking industry may suggest that merger is a deeply resented measure by this species. Well, here comes the shocker! The trade union of a parallel industry happens to have a diametrically opposite view. We are, of course, talking of the GIEAIA (General Insurance Employees All India Association) whose 10th Biennial Conference recently concluded at Nagpur. This body of general insurance employees with strong Communist credentials has been clamouring for the merger of the four PSU arms of the General Insurance Corporation of India, i.e., National Insurance Company Limited, Oriental Insurance Company Limited, New India Assurance Company Limited and United India Insurance Company Limited, into one. They deeply believe that the amalgamation will result in enhanced financial stability, capacity to bear risk and prowess to combat competition which would translate to service to people of all walks of life including the poorest sections of the society. As a matter of fact, their press release emphatically used those very words. What is worth noting though, not even a single word was breathed about job redundancies or “branch closures” that such a merger may lead to.

Indeed, the contrast couldn’t have been starker if one were to turn to the Banking sector where a posse of employee unions and associations are fighting a pitched battle against the pro-merger manoeuvers of the “management”, with special focus to the State Bank Group which has finally started to restructure and synergize its business by merging its associates with self. With the recent approval of merger of State Bank of Indore with the SBI, the saber rattling has reached a crescendo. The entire lot is crying itself hoarse over the merger which they claim will lead to closure of large number of branches leading to huge job losses, greatly reduced competitiveness, curtailment of banking services to the masses, severance of socio-cultural ties of the customers and immense loss of business.

It is time to have a closer look at the antithetical views of the insurance and banking employee unions. In case of the general (non-life) insurance sector, the group happens to be the single dominant body across its four units and thus faces no threats on account of a merger. Their desire to merge emanates from their anxiety to beat the emerging private sector. On the other hand, the Banking industry has witnessed massive expansion in the aftermath of two rounds of nationalization resulting in matching proliferation of the trade union bodies. A merger may seriously tip the balance in favour of a rival faction. As is obvious, certain factions of the State Bank Group are shuddering at the thought of extreme marginalization, if not extinction on account of merger. Thus, its not difficult to see that the trade unions of both the sectors are merely fighting the battle of self perpetuation. While it is really difficult to assess whether the path chosen by the insurance sector unions is brilliant or accidental, that of the banking sector unions is utter disrespect to the wishes and welfare of its own participating members for sure.

With Dr Manmohan Singh at the helm for a consecutive term, a gearshift in reforms in the financial sector is the least the nation expects of him. However, barely few hours after the Minister of Finance exhorted the banking sector on the virtues of consolidation, the institutionalized junta started to pull every possible string to debunk the entire idea. Faceless ministry officials have started expressing concerns over the impending merger of the State Bank Group, which they feel will lead to “creation of a behemoth”. Quaint journalists and Ghost writers, hastily recalled from hibernation, are suddenly working overnight to propound philosophical views against merger. Dignitaries retired from the judiciary are expressing profound concern over the merger of Associate Banks and the resultant devastation of “cultural ties”. And to think that SBI doesn’t figure in the list of even top 10 Asian Banks, leave alone the world! And to think that Industrial and Commercial Bank of China is the size of a dozen SBI’s and more, and has probably deeper rooted cultural ties in China than the plethora of desi, regional, rural, cooperative and associate banks have within their respective areas, in our great multi-cultural nation.

While the illustrious (and the not-so-illustrious) media casually flashed forward the official communiqué of the Junta, otherwise referred to as unions/associations, claiming that “employees” of State Bank of Indore struck work on the 22^nd of June opposing merger with SBI, nothing could have been farther from truth. As a matter of fact, a simple headcount would have revealed that the participation in the strike was barely 50% and the Junta couldn’t have fallen flatter on their face. But then failure of a strike call hardly makes for a spicy headline.

While I congratulate the half that shred apart the blinkers that were smothering their normal visions, allow me to speak on behalf of the ‘other half’ that extended “full support” to the strike.

The Junta has traditionally had deep tentacles spread across the nooks and corners of the host institutions. Like the proverbial FBI, even if you start talking to a wall they are certain to find out. New entrants are forced to join the quagmire, sometimes even by the scruffs of their necks, which ensures a healthy flow of contributions. Any dissent thereafter is stamped out swiftly and surely. They seem to have mysterious links to the two Holy Grails of an official’s life: Promotions and Transfers. And the hapless souls spend their entire career tripping over one or the other. Many a times they may be nursing a baby, or taking care of their weather beaten parents. As they advance in years, their kids arrive at critical academic milestones. Further ahead, the advancing age finally catches up with them bringing along a battery of physical failings. Thus, initiating hostilities with such potent masters would result in disastrous and at times tragic consequences at most points of their careers.

But are not the officials reinforcing the hands of entities inimical to their own interests?

Fortunately, the tide has decidedly taken a turn and the furious snarls and rants may just be the last hurrah of the Junta. The merger, or rather restructuring of business, of State Bank of Indore may prove to be an acute acid test.

If winds of change bring the fear of uncertainty with them, winds of change blowing intermittently for nearly half a century would but compound the fear of the unknown. Manifestation of this basic human emotion is getting louder and louder as the years pass by, gaining shape in acerbic reactions of various sections across the State Bank group, over the merger of the Associate banks with the SBI.

Transformed from the earlier State owned banks to subsidiaries of SBI, the associate banks had a quaint flag-off in the financial world in their new avatars. They were congenitally destined to remain fringe players as they were expected to remain firmly entrenched in the basins of their origin. For them, to think of other regions was grotesque. To think national was the job of the SBI. To think global was taboo. They were ideologically psyched into believing they were institutions whose uniqueness lied in being ‘regional’ banks. And while comparable banks from the same regions fanned out exponentially to become prominent national players having overseas presence, the associate banks remained content to flash the medallion of regionalism, forgetful of the prospects beyond in their imposed myopia.

The elaborately concocted potion of the State Bank Group, being brewed till date, epitomizes the half-hearted remedial measures that our political masters are apt to take, postponing mission critical acts to obscure future. Today, even though the associate banks are efficient and profitable units in themselves, and are even better than their principal in certain parameters, their future remains compromised by the false starts they had. Fifty odd years of existence in harness to the principal has further ensured an absence of dreams of growing or diversifying in significant ways. This is not surprising however, when one considers the original script of the play wherein these bodies were created to help SBI play the role of a potent national bank, and eventually to merge with it.

All along and as the associate banks enter the sixth decade of their existence, a dozen or so political regimes of all creeds and hues have beaten about the bush without any real will to reform the banking sector, leave alone resolving the dilemma of the associate banks. Although the question of merger has been invoked by the progressive elements every now and then, both affirmations and negations have quickly followed, not to mention the inevitable clamouring of the trade unions. And sure enough, the views emanating from different quarters have oscillated like the proverbial pendulum, except of course, those from the leftist bastion having controlling interests in many trade unions.

There is a less explored dimension to this rather overstretched saga of determined indecision that unfortunately remains ignored. Banks being a services industry, they are human resource intensive bodies. The perpetual supplementary status combined with a methodically controlled environment has done little good to the morale of the human capital of the associate banks. Worse still, the permanent uncertainty over the future has been a fertile tract for deep apprehensions among the rank and file. As a consequence, opportunists and organized pressure groups have taken advantage of the sustained confusion and have furthered their selfish cause to the detriment of the entire system.

Prodded by the approaching watershed of March 2009, as also the recent rise in the stature of ICICI Bank, SBI seems to have recalled the original plot of the play by approving the merger of State Bank of Saurashtra, one of its 7 associates, with it recently. But is the group anywhere near the climax? As expected, power clubs which have merrily thrived within the small shores of the associate banks have sprung to action, sensing imminent end. Divorce from SBI to form a separate entity together is being vociferously argued. All may not be quiet on the other front either. Faced with the imminent influx of thousands of employees, SBI appears to have its own share of rattled denizens. The fear of being overwhelmed by the deluge may goad many to adopt a defensive attitude against their peers in associate banks. Such a divide, fuelled by the never ending rigmarole, would indeed be unfortunate for an institution having global ambitions.

Four ancient banking entities called Madras Bank, Carnatic Bank, Bank of Madras and Asiatic Bank were merged as early as 1843 to form Bank of Madras.

Three Presidency Banks, Bank of Calcutta (later rechristened Bank of Bengal), Bank of Madras and Bank of Bombay were merged to form The Imperial Bank of India in 1921. The Imperial Bank of India took its modern day avatar as the State Bank of India in 1955 with the passing of controlling interest to the RBI, which has been further passed down to the Government of India recently.

The game is not new to the associates of the SBI, earlier referred to as subsidiaries, either.

Five banks of the erstwhile states of what is now Gujrat, Rajkot State Bank, Porbandar State Bank, Palitana Darbar Bank, Vadia State Bank and Bhavnagar Darbar Bank were merged to form State Bank of Saurashtra, (which has in principle been merged with SBI now).

Hyderabad Mercantile Bank was merged with Hyderabad State Bank to form State bank of Hyderabad.

State Bank of Bikaner and State Bank of Jaipur were merged to form State Bank of Bikaner & Jaipur in 1963, which further absorbed Govind Bank Pvt. Ltd.in 1966.

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