SBI Restricts Employees and Dependents from Opening Demat Accounts Outside State Bank Group: Social Media Criticises 'Hilarious' Directive

The State Bank of India (SBI) has issued a new directive restricting its employees and their dependents from opening Demat accounts with depositories outside the State Bank Group. The circular No.: CDO/P&HRD-PM/13/2024-25, dated 27 May, 2024, has been marked as “STRICTLY FOR INTERNAL CIRCULATION ONLY”. Yet, copies of the circular are being circulated on social media putting SBI through a sudden backlash.

New Restrictions Announced

In the latest circular, the competent authority of SBI has outlined a new policy aimed at monitoring and restricting the Demat accounts held by employees and their wholly dependent family members. The circular states that “no officer/Award Staff shall open their or their wholly dependent family member's Demat Account and/or Trading Account outside the State Bank Group without prior written permission of his/her controller not below the rank of Chief General Manager.”

The circular further specifies that the permission letter should be maintained in the respective service files. The employees are also required to submit their and their dependents' Demat account statements to SBI on a quarterly basis for verification. Any breach of these instructions will be treated as misconduct and will be subject to disciplinary actions under specific rules of SBI officers’ service rules and award staff conduct rules.

(An X post criticising the new regulation.)

Post Facto Permission Requirement

Additionally, employees must obtain post facto permission from their controllers, not below the rank of CGM, to continue with existing Demat/Trading accounts outside the State Bank Group. They have six months from the issuance date of the circular to either obtain this permission or close such accounts.

The circular has been issued by Binod Kumar Mishra, Deputy Managing Director (HR) & Corporate Development Officer, and it emphasises that the contents must be brought to the notice of all concerned employees. The directive is intended to ensure a system of monitoring and control over the financial dealings of SBI staff and their dependents.

Speaking to Kanal, Soumya Datta, the Joint Convenor of Bank Bachao Desh Bachao Manch(BBDBM), criticised the new directive, stating, "The imposition of restrictions preventing employees and their dependents from opening Demat accounts outside the State Bank Group represents a clear example of restrictive HR policies." Datta further highlighted concerns about the limitation on employees under the NPS scheme, which compels them to invest solely in SBI Pension Fund despite potentially higher returns from other funds.

BBDBM strongly opposes these restrictions, viewing them as an infringement on the constitutional rights of employees. Datta asserted that BBDBM is committed to exploring all legal avenues to challenge SBI Management's decision, emphasising the need to safeguard employees' rights and ensure fair and transparent practices within the public sector lender.

Social Media Backlash

(An anonymous banker takes a sarcastic dig at SBI’s new directive.)

SBI's directive has faced significant criticism on social media. Their own employees and banking community on social media have expressed their discontent, calling the move dictatorial and arguing that it infringes on personal choices. Critics argue that the restriction affects not only the employees but also their spouses and dependents, limiting their financial autonomy.

(Another post on X criticising the arbitrary decision.)

The new SBI circular has sparked a debate on the balance between corporate governance and personal freedom. While the bank aims to implement stricter monitoring mechanisms, the policy's reception among employees and the wider public remains contentious.