Is SBI discriminating with Officers of Merged Associate Banks? Case filed in Telangana High Court

The Telangana High Court has decided to hear an important case related to the merger of five associate banks with the State Bank of India (SBI). A division bench consisting of Chief Justice Aparesh Kumar Singh and Justice G.M. Moinuddin admitted an appeal filed by P.T.M. Gopala Krishna and others.

The petitioners have challenged the government orders issued during the merger of State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore with SBI. They argued that the new service conditions introduced after the merger were illegal and arbitrary.

According to them, the option letters issued in March 2017 forced employees to either accept the new terms of service or resign. They further contended that these letters were issued by the chief general manager, who did not have the legal authority to frame service conditions. Under the State Bank of India Act, 1955, such decisions could only be taken by the SBI Central Board. Employees of merged associate banks have said that they are not being given benefits and allowances that are provided to regular SBI employees.

It is stated that this so-called option letter is unknown to service jurisprudence. A permanent employee or officer cannot be forced to resign if he or she does not like the new terms and conditions imposed by the Management. Moreover, the so-called offer of Employment Letter dated 29.03.2017 does not refer to any terms and conditions of service approved by the Central Board of the Transferee Bank i.e. State Bank of India. Therefore, it can be seen that CGM has no authority to unilaterally issue offer of employment letter which are not sanctioned or approved by the Central Board of the Transferee Bank.

It is stated further that a reading of the options under Clause No.3 shows that the Employees of Associate Banks have been subjected to hostile discrimination. Clause 3 (b) of the Annexure to offer letter, clearly says that Probationary Officers and Trainee Officers in SBI will get four additional increments, whereas Probationary Officers and Trainee Officers of Associate Banks will not get those additional increments. In other words, there is clear and blatant discrimination in the matter of increments as far as Probationary Officers and Trainee Officers of Associate Banks are concerned.

Previously, the SBI had acquired State Bank of Saurashtra on 23-08-2008 and State Bank of Indore on 28-08-2010. While acquiring State Bank of Saurashtra, the terminal benefits, pension, gratuity, and Bank’s Contribution to Provident Fund (with interest), were given to them.

Similarly, while acquiring State Bank of Indore, the same terminal benefits, pension, gratuity, and Bank’s Contribution to Provident Fund (with interest), were given to them as mentioned in Section 2 (a) of the Terms & Conditions of Service Applicable to Officer Employees of State Bank of Indore (SBIN) after acquisition of SB Indore by SBI.

Therefore, the officers of the Associate Banks had a legitimate expectation that SBI would extend similar benefits to them based on past practice.

Earlier, a single-judge bench had dismissed their petition. The court had ruled that the petitioners did not have the legal standing to challenge the government’s orders. It also observed that most officers from the associate banks had voluntarily shifted from the contributory provident fund system to the pension scheme, which was seen as acceptance of the new service conditions.

However, the appellants have now argued that the earlier judgment ignored crucial legal issues and wrongly relied on developments that happened after their case was filed.

Taking note of these submissions, the High Court bench has issued notice to the Reserve Bank of India (RBI) and has posted the case for further hearing.

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