It will be a smooth transition: SBM GM

It will be a smooth transition: SBM GM

It will be a smooth transition: SBM GM

City-headquartered State Bank of Mysore (SBM) is unnerved and confident of taking the century-old legacy forward, after the merger of five associate banks with State Bank of India (SBI).

Speaking to DH, SBM general manager Nemiraj H C said, “The merger is going to benefit customers in a big way as marginal cost of lending rates (MCLR) is better in SBI compared with other nationalised banks. The objective of the merger is to emerge as a global bank to compete with peers in emerging markets. Customers will not face any problem after the merger. For any queries, they can dial the call centre number,” he said.

When asked about the challenges on IT system changes, Nemiraj said, “SBM has been using core banking services (CBS) from 2006. Customers will not face any problem in the transactions. All our ATMs (automated teller machines) are interlinked. It may take at least 45 days to completely transform, till then customers have to visit SBM branches only for transactions,” he said.

“Over a period of time we will communicate to our customers about changes in IFSC (Indian Financial System Code). Existing cheque books can be used till they are exhausted,” he said.

The bank has 160 branches in Bengaluru and over 800 branches across Karnataka with 10,500 staffers. The major change after merger for SBM will be that there will be only one board. The bank has given voluntary retirement scheme (VRS) option for its employees.

“Eligible employees will be paid an ex-gratia amounting to 50% of the salary for the residual period of service, subject to a maximum of 30 months’ salary,” he said.

Sharing his views, Charan Singh, former RBI chair professor at IIM Bangalore said, “The advantage is that it will become a large bank and there will be uniformity in rates. There will be advantages of economy of scale and rates of interest. The customer will benefit from lower rates of interest.”

“There will be lack of competition, which might take a toll on customer service. There will also be uncertainity. Some branches will close and the relationship that customers had built with the nearest branches will change. New forms of banking will emerge as many big branches will have to go,” Singh said on the disadvantages of the merger.

He emphasised on the cultural connect with the local population of various SBI subsidiaries, adding that senior citizens will find it difficult in such a scenario, though it will bring in a lot more professionalism.