Unions of the largest lender of the country, State Bank of India are not in agreement to the proposal by the Goverment to merge all associate banks of SBI with itself. They are concerned over the fact that the step may deter the growth of public sector banking space in India.

According to a statement by State Bank Staff Union and SBI Officers Association of Kerala Circle, the merger process would ultimately result in privatization of Indian financial sector.

They said that the need for mergers would have been justified if all scope of organic growth had become over. The banking scenario in the country however did not show any lack of such scope. More than 50% of the Indian households have not yet been touched by banking.

The statement read that it is not supported anywhere from experiences all over the world that mergers increased efficiency of an institution.