The State Bank of India (SBI) Shareholders Association has alleged that the local head offices of the bank are functioning without local boards. It has also questioned as to why material information pertaining to the US Federal Reserve's action against the bank and the Rs 37 crore penalty imposed was concealed in the annual report.
The association said that though 30 local board members of different boards, who had functioned much beyond their statutory term of three years, had retired, these vacancies had not been filled up and the present position as shown in the annual report was "very" serious. SBI has 14 local head offices and each head office has a local board constituted under the SBI Act.
SBI chairman Janki Ballabh was not available for comment. "Earlier the boards were continuing for years and decades, that is, much beyond their statutory term and we had to struggle to get them removed. But now it is all the more serious that the bank has been functioning without the local boards which is illegal and unfair," said the association in a 14-page note to the shareholders.
It said the increased profit for the current year was mainly on account of the VRS, which was taken up 20,784 employees, in 2001. The bank made a saving of Rs 859 crore on account of wage bill in FY 2002 and profitability has increased to that extent.
On the issue of the loss-making SBI Home Finance affecting the profitability of SBI, it said, "we have been representing to the management on this issue for the last several years but it appears that SBI management is not serious. It is reported that the bank has advanced more than Rs 300 crore to bail out this drowning boat and that too without security."
