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Telangana State to lose Nizam-era bank
As Telangana gears up for grand birthday celebrations next month, the two-year-old State is all set to lose State Bank of Hyderabad (SBH), its pride banking ‘asset’ that has its origins dating back to Nizam era.
SBH merger with SBI
Set up as Hyderabad State Bank in August 1941, the bank opened its first branch at Gunfoundry nine months later in 1942
Hyderabad: As Telangana gears up for grand birthday celebrations next month, the two-year-old State is all set to lose State Bank of Hyderabad (SBH), its pride banking ‘asset’ that has its origins dating back to Nizam era.
Incidentally, SBH is the lead bank for Telangana State and heads its State Level Bankers Committee (SLBC) that handles institutional lending and co-ordinates with the government on development activities including key agriculture financing.
On Tuesday, State Bank of India, the country’s largest lender, has announced its decision to merge with itself five associate banks including the SBH, the biggest one among them, and sought approval from the central government for the same. Though there is no definite timeline for the merger, SBI Chairperson Arundhati Bhattacharya said the process would be completed expeditiously.
“SBH is as big as some independent banks. Though many big banks posted huge losses in last financial year, the SBH reported net profit of around Rs 1,100 crore and did a total business of over Rs 2.5 lakh crore. So, there is no reason to merge our bank with SBI,” S B Rajasekhar, President, State Bank of Hyderabad Staff Association, told The Hans India. Over 19,000 people work in the SBH which operates around 2,000 branches now, he added.
Established as Hyderabad State Bank on August 8,1941 by the erstwhile Nizam regime through Hyderabad State Bank Act, 1941, the bank managed Osmania Sikka, Nizam’s currency, public debt and also commercial banking activities in Hyderabad State comprising present day Telangana, Hyderabad-Karnataka of Karnataka and Marathwada (now in Maharashtra).
The bank opened its first branch at Gunfoundry in Hyderabad on April 5, 1942 and it took over Hyderabad Mercantile Bank Ltd in 1953. The Reserve Bank of India (RBI) converted the bank as its subsidiary in 1956 and renamed it as State Bank of Hyderabad, the name that the bank sports till today. SBH turned into a SBI subsidiary in 1959.
“The SBI management has gone ahead with its decision to go for the merger even though workmen directors and some others have opposed it. We have already chalked out a programme to protest and oppose the unilateral merger proposition,” Rajasekhar said, adding that SBH has capacity to emerge as independent bank if it’s separated from SBI.
By P Madhusudhan Reddy
