Writ plea against SBT-SBI merger

A set of customers and shareholders have filed a writ petition in the High Court of Kerala challenging the proposed merger of State Bank of Travancore (SBT) with State Bank of India (SBI) alleging that constitutional provisions have been violated.

The petitioners argued that there is no provision in the SBI Act or General Regulations to acquire SBT by SBI. The writ petition is now posted for filing of counter filing by the Government of India, the Reserve Bank of India, SBI, and SBT.

The Union Cabinet and the SBI had recently decided to merge all its five associate banks, including State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP), and State Bank of Hyderabad (SBH),

Against Constitution

“The forceful acquisition and preventing few directors from taking informed decisions without giving chance to the shareholders to express their grievances, without authority of law or illegally assuming any powers, are against the very basis of the Constitution of India,” it stated.

Sajan Peter, Director and Chairman, Audit Committee of the board, and M. C. Jacob, Director, SBT, had recently said that the whole procedure for the acquisition of SBT has been vitiated ab initio and due procedures and laid down norms have not been followed both in letter and spirit.

Moreover, the petitioners have argued that no regulations give any power to SBI and SBT to introduce an important matter like acquisition of SBT by SBI as ‘Table Agenda’ in the board meetings. This is “unconstitutional, ultra vires and void, and hence, liable to be quashed.”

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Printable version | Oct 27, 2020 8:46:08 AM |

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