Merging of SBI ASSOCIATES BANKS
Amith
(Querist) 13 October 2016
This query is : Resolved
Dear Sir,
My question is regarding the merging of State Bank of India's Associate Banks in to SBI.
In the THE STATE BANK OF INDIA (SUBSIDIARY BANKS) ACT, 1959
1ACT NO. 38 OF 1959 [10th September, 1959.] it clearly stated that in clause no.
57. Bar to liquidation of a subsidiary bank.-No provision of law relating to the winding up of companies shall apply to a subsidiary bank nor shall it be placed in liquidation, save as provided in this Act or by order of the Central Government and in such manner as the Central Government may direct.
If the ACT itself against the winding up of the SBI subsidiaries, how the Government can merge the ASSOCIATE BANKS with SBI without repealing (with out consent of the Parliament). It is against the Law or not?
Amith
(Querist) 13 October 2016
Dear Sir,
My question is regarding the merging of State Bank of India's Associate Banks in to SBI.
In the THE STATE BANK OF INDIA (SUBSIDIARY BANKS) ACT, 1959
1ACT NO. 38 OF 1959 [10th September, 1959.] it clearly stated that in clause no.
57. Bar to liquidation of a subsidiary bank.-No provision of law relating to the winding up of companies shall apply to a subsidiary bank nor shall it be placed in liquidation, save as provided in this Act or by order of the Central Government and in such manner as the Central Government may direct.
If the ACT itself against the winding up of the SBI subsidiaries, how the Government can merge the ASSOCIATE BANKS with SBI without repealing (with out consent of the Parliament). It is against the Law or not?
Kindly reply.
Amith
(Querist) 13 October 2016
Kindly reply
P. Venu
(Expert) 13 October 2016
It is the basic principle of interpretation of statues that the statute needs to be read as a whole.No menaingful suggestion can be attempted on the isolated reading of a provision.
Rajendra K Goyal
(Expert) 13 October 2016
How are you concerned?
Academic query not replied.
Merger may not be liquidation.
Kumar Doab
(Expert) 13 October 2016
Agreed with experts.
Respond to the points raised by experts.
Amith
(Querist) 13 October 2016
Dear Sir,
I attached the link related to the ACT.
In this Act. It clearly stated in clause no.57. regarding the windup/dissolution of Associate banks of SBI. From this clause it is clear that the ASSOCIATE BANKS can't be wind up / dissolved in any reason. The merging is also coming under winding up. After merger thr will not be SBM,SBT,SBP etc. Ie this merging is whether against the clause or not.
https://www.google.co.in/search?site=&source=hp&ei=rcj-V8_FI4HlvgTKhZm4Cg&q=state+bank+of+India+associate+banks+act+&oq=state+bank+of+India+associate+banks+act+&gs_l=mobile-gws-hp.12...2740.28196.0.29247.29.28.1.7.7.0.393.8282.2-14j14.28.0....0...1c.1.64.mobile-gws-hp..1.25.5590.3..0j41j0i131k1j0i22i30k1.wdIUerw5Jdo#xxri=1
Amith
(Querist) 13 October 2016
Link : https://www.sbi.co.in/portal/web/corporate-governance/state-bank-of-india-subsidiary-banks-act
Amith
(Querist) 13 October 2016
Link : https://www.sbi.co.in/portal/web/corporate-governance/state-bank-of-india-subsidiary-banks-act
Amith
(Querist) 13 October 2016
Link : https://www.sbi.co.in/portal/web/corporate-governance/state-bank-of-india-subsidiary-banks-act
Guest
(Expert) 14 October 2016
You have the need to interpret the part of the sentence, "save as provided in this Act OR by order of the Central Government and in such manner as the Central Government may direct," as included in the referred section.
Guest
(Expert) 14 October 2016
By the way, in what way you are concerned with the merger of the subsidiary banks with SBI?
Kumar Doab
(Expert) 14 October 2016
Is merger=winding up?
Amith
(Querist) 14 October 2016
@kumar doab, copy paste link :
https://atlasjurisassociates.wordpress.com/2015/01/27/dissolution-of-companies-mergers-winding-up-and-striking-off-of-companies/
Amith
(Querist) 14 October 2016
@ P.S Dhingra,
Correctly interpret.
' 57. Bar to liquidation of a subsidiary bank.-No provision of law relating to the winding up of companies shall apply to a subsidiary bank nor shall it be placed in liquidation, save as provided in this Act or by order of the Central Government and in such manner as the Central Government may direct.'
In simple language, it is just like 'Neither..... nor'. Not 'Either.... or'.
ie ; neither provision to liquidate/ wind up, or (sentence continuing ) by any order of Central Government.
am I right Sir?
Amith
(Querist) 14 October 2016
@kumar doab,
More over the technique of Merging is coming under 'company laws'. Then how it can be done without repealing the ACT?
Amith
(Querist) 14 October 2016
@ P.S Dhingra, Correctly interpret. ' 57. Bar to liquidation of a subsidiary bank.-No provision of law relating to the winding up of companies shall apply to a subsidiary bank nor shall it be placed in liquidation, save as provided in this Act or by order of the Central Government and in such manner as the Central Government may direct.' In simple language, it is just like 'Neither..... nor'. Not 'Either.... or'. ie ; NEITHER provision to liquidate/ wind up, NOR (sentence continuing ) by any order of Central Government.
Rajendra K Goyal
(Expert) 14 October 2016
If you feel the merger is against law, may approach law. Discuss with senior lawyer. There can be no end to academic discussion.
Amith
(Querist) 14 October 2016
I'm asking to lawyers club, You people are my senior advocates.
Guest
(Expert) 15 October 2016
Mr. Amith,
First of all, you may need to reply my question, "in what way you are concerned with the merger of the subsidiary banks with SBI?" The question of interpretation of 57 comes later.
Amith
(Querist) 15 October 2016
@I'm not concerned about merging, but I'm concerned about the eagerness of some persons to kill Public sector undertaking (which are the assets of the Nation) for the benefit of corporates. Even though the 57 clause clearly mentions there is no provision to wind up these subsidiaries, and Government does not have any right to do so... Then what is going on in my Country and all these for whose benefit?
adv.bharat @ PUNE
(Expert) 15 October 2016
Amit please clearly mentioned how corporate will be benefited by SBI merger?
Central government have discretionary power in interest of public.
Guest
(Expert) 15 October 2016
Mr. Amith,
Evasive reply! You may or may not have any concern with merger or otherwise, but how does that affects you and how that be considered as your personal problem?
However, if the problem is not related to you in person, but you are still concerned with killing of public sector undertaking, you may file a case in the competent court of law and take stay order.
In fact, yours is purely an academic query, where you have the need to interpret the section properly to solve your academic question.
Rajendra K Goyal
(Expert) 15 October 2016
After merger the entity would remain public sector and with more assets / chances / area covered / opportunity.
Amith
(Querist) 15 October 2016
@bharath,Rajendra.
Sir, The associate banks 80% shares are in the hands of SBI. All these banks business/networth are already accounted in SBI balance sheet. All these banks are doing business on behalf of SBI. Then what is the meaning of this merging. How we can tell that after merging all these associates banks, SBI will become BIG SBI. Just remember that in India SBT having 1rank in NRI deposits (Even SBI have all over presence in KERALA). The 2nd position is for a Private bank. In India 80% banking business is with Public sector Banks. So if we reduce the number of these Public sector Banks who is going to be benefited? By which way we can tell there is public interest involved.
But my question is even the law has not even granted permission to Government to wind up these Associates banks, who gave permission to these banks Director boards to give consent to merge with SBI, and subsequently to wind up?
Amith
(Querist) 15 October 2016
@bharath,Rajendra.
Sir, The associate banks 80% shares are in the hands of SBI. All these banks business/networth are already accounted in SBI balance sheet. All these banks are doing business on behalf of SBI. Then what is the meaning of this merging. How we can tell that after merging all these associates banks, SBI will become BIG SBI. Just remember that in India SBT having 1rank in NRI deposits (Even SBI have all over presence in KERALA). The 2nd position is for a Private bank. In India 80% banking business is with Public sector Banks. So if we reduce the number of these Public sector Banks who is going to be benefited? By which way we can tell there is public interest involved.
But my question is even the law has not even granted permission to Government to wind up these Associates banks, who gave permission to these banks Director boards to give consent to merge with SBI, and subsequently to wind up?
Amith
(Querist) 15 October 2016
If we merge all the states in India, whether we will get a BIG INDIA. By doing so We will loose Republic of India get Indian Federation.
adv.bharat @ PUNE
(Expert) 15 October 2016
amit u need to spceify why are u against the merger of bank.
state have their own power WRT bank One bank can operate through the different branches through mangers.
Amith
(Querist) 15 October 2016
@adv. Bharath, I don't know what is the benefit of Merging these Associates banks, Public sector Banks. All these banks are owned by Government (except SBI ASSOCIATES). All these banks netwoths are accounted. By merging all these banks how Government can claim we have Big banks. These different Public sector Banks are like branches of a bank for Government. More over in this current structure these Public sector Banks saved INDIA from 2008 recession, uplift the society. All these banks have lending capacity for any Indian (How big he is). Then by these merging how a common man/society going to benefited?
Guest
(Expert) 15 October 2016
Mr. Amith,
I wonder to know why you don't reply my question, "but how does that affects you and how that be considered as your personal problem?"
So, instead of making the experts aware of what problem you have with the merger of the subsidiaries if the SBI, you have been trying to side-track the issue with one or the other excuse.
In fact, you have knocked the wrong door. It is not your personal problem, rather you want some academic information about the merger of banks with the SBI. You should not have treated the experts as the Public Information Officers on behalf of the Ministry of Finance, SBI or its subsidiaries to provide you any such information you desired, e.g., :how a common man/society going to benefited".
So, if you can't interpret properly your own referred section of the Act, in order to get authentic information, you may ask for the requisite information through RTI from the Ministry of the bank concerned.
You should not expect any tutorial to be imparted by the experts to the students. However, if you have any personal problem with the present issue, come forward with the real problem, not the academic nature of questions.
Amith
(Querist) 15 October 2016
@P.S Dhingra,
Dear Sir, You are right. There is not all any personal issues involved, rather than I'm curious to know that, An Act passed by the Parliament (SBI subsidiaries ACT), in that act the clause 57 states dissolution. I just want to know anyone have power to violate an ACT which is passed by Parliament.
My all other replies above are only according to the questions asked.
Guest
(Expert) 15 October 2016
You may also read definition of "subsidiary bank" besides properly interpreting the section 57 for more clarification.
Amith
(Querist) 15 October 2016
Ok...
(k) "subsidiary bank" means any new bank and includes the Hyderabad Bank and the Saurashtra Bank;
3. Establishment of new banks.- With effect from such date as the Central Government may, by notification in the Official Gazette, specify in this behalf, there shall be constituted the following new banks, namely:--
(a) the State Bank of Bikaner;
(b) the State Bank of Indore; 1(c) [*
* * * *]
(d) the State Bank of Mysore;
(e) the State Bank of Patiala;
(f) the State Bank of Travancore;
and different dates may be specified for different new banks.
Devajyoti Barman
(Expert) 15 October 2016
This place is not meant to discuss on right or wrong of governmental actions.
The author does not seem to have direct connection with the query posted .
Hence I prefer not to post my reply on academic discussion.
Rajendra K Goyal
(Expert) 16 October 2016
Agree with the expert Devajyoti Barman.
