India's biggest bank will confront a Herculean errand, incorporating the five partner banks — State Bank of Mysore (SBM), State Bank of Patiala (SBP), State Bank of Hyderabad (SBH), State Bank of Bikaner and Jaipur (SBBJ), and State Bank of Travancore (SBT) — and the Bharatiya Mahila Bank (BMB) — in perspective of worries among workers of these banks that they may get a crude arrangement.

The workers are stressed that their advancement prospects might be hampered because of abbreviation of rank. Further, defense of branches because of cover may prompt their movement.

An executive of one of the partner banks (ABs), who went to his bank's executive meeting on May 17, stated, "The way in which the merger is being endeavored, simply acquiring it as a table thing at the executive meeting and without talking about how might this benefit every one of the partners, it isn't the correct activity.

"How might you anticipate that the executives will apply their psyches when abruptly such a vital issue is conveyed to the board? As a matter of first importance, they ought to have flowed foundation papers on the favorable circumstances/weaknesses of merger, the economies of scale that could be determined, and so on. All these ought to have been displayed in high contrast."

Hindrances of SBI Merger

With this merger, it is normal that bank administration will bear some basic difficulties identified with Staff Integration and defense of branches. A few worker unions are against the merger. They are unsecured of specialized glitches which can be a detour in their operations.

Why is merger not a smart idea at this point?

A Forced Merger

Obviously, this is a constrained merger by the administration, which is pushing for combination in people in general segment managing an account space. The present boss Arundhati Bhattacharya has prior gone on record that the merger of partner banks isn't a need at the present crossroads.

Current difficulties much more imperative than a merger

It's a battle for survival for PSBs as the computerized managing an account activities took off by private banks and fintech organizations are giving an extreme battle to government banks. Indeed, many banks are yet to wake up to this reality. Actually, Bhattacharya was pulling every one of the assets to confront the present difficulties where she has propelled a portable wallet, advanced branches and furthermore tied up with Reliance Industries for an installment bank.

Very little pick up as far as size

While the SBI do get the banks modest as valuations are down , yet regarding monetary record, the SBI as of now has a size where the contrast between the SBI and the second player is as high as Rs 12 to Rs 13 lakh crore. In any case, a merger of partner banks gets a wide range of difficulties terms of individuals, innovation, item and branch mix, which takes numerous years. The whole administration transmission capacity would continue settling the merger throbs.

Capital and NPA challenges

Obviously, the PSBs are going through a troublesome period with decaying resource quality and quick subsiding capital base. The banks require capital for engrossing a significant number of the misfortunes out of focused on resources. Given the merger of partner banks , there is probably going to be weight on the bank's valuation in the market in the medium to longer term. This would make more up to date challenges for the SBI, which was so far much superior to alternate PSBs as far as execution.