All India Bank Employees Association (AIBEA) on Monday opposed the government's decision to merge three PSU banks saying the need of the hour was not the merger but expansion of banks.

“There is no evidence that merger of banks will strengthen it or make it more efficient," AIBEA General Secretary C H Venkatachalam said soon after Finance Minister Arun Jaitley announced the decision to merge Dena Bank, Vijaya Bank and Bank of Baroda. 

"We have seen the example of five associate banks merging with SBI. No miracle has happened. On the other hand, it has resulted in the closure of branches, increase in bad loans, reduction of staff and business. For the first time in 200 years, SBI has gone into loss,” he added.

Venkatachalam also said the total bad loans of five associate banks as on March 2017 was around Rs 65,000 crore and that of SBI at Rs 1,12,000 crore. Now in 2018 bad loans of SBI has increased to Rs 2,25,000 crore.

“So it is clear that merger has not helped to recover bad loans,” he said.