Chennai:The proposed merger of the State Bank of India (SBI) with its associate banks is the government's ploy to divert attention from the massive scale of corporate bad loans, said an official of All India Bank Employees' Association (AIBEA). "The central government is trying to divert the nation's attention from the Himalayan scale of bad loans given by the nationalised banks, including SBI, instead of focusing on recovering these and punishing the culprits," C.H. Venkatachalam, General Secretary of AIBEA, told IANS. The union cabinet on Wednesday approved the merger of the SBI with its five associate banks -- State Bank of Bikaner and Jaipur (SBBJ), State Bank of Travancore (SBT), State Bank of Patiala (SBP), State Bank of Mysore (SBM) and State Bank of Hyderabad (SBH) -- as well as Bharatiya Mahila Bank. Venkatachalam said the SBI itself has bad loans of about Rs 100,000 crore and it should be focusing its energies on recovering these and increasing its business. The merger is also not good for business as many big accounts in associate banks might shift to other smaller banks instead of remaining with the merged entity, he said. "The associate banks have a peculiar and strong geographical flavour. Many deposit and loan accounts with them exist because of their local flavour, small size and agility," Venkatachalam said. About 10-20 per cent of the business of the associate banks might shift to other public sector banks like Canara Bank in Karnataka or Andhra Bank in Andhra Pradesh and others, he said. A banking sector expert agreed with Venkatachalam, saying some business of the associate banks will move to other banks post merger. "A big client of an associate bank branch will become just one more customer for the SBI, post merger. So, the customers will lose the personal touch that they enjoy now with the branch officials," Venkatachalam added. He dismissed the allegation that the AIBEA is opposing the merger because it will lose the status of a leading union in the five associate banks and become a minority union in the merged entity. Currently, the AIBEA has a presence in associate banks, but none in the SBI. "Actually the merger is good for AIBEA. We will open our innings in SBI as a major force from day one of the merger with a membership size of around 45,000," Venkatachalam said. The AIBEA will also become the leading union in some of the SBI circles, he added. "Knowing AIBEA, there are also bright chances of the union growing its membership base post merger," Venkatachalam said. He said the merger will result in a major human resource problem as service conditions of the associate banks are different from the SBI. "Further, in the merged entity the employees of the associate banks will be treated as second class employees. When it comes to rationalisation of branch network, it will be the branches of associate banks that would be closed and the staff working there would be shunted out," Venkatachalam said. "The seniority of the employees of associate banks will not be protected. Even today the erstwhile employees of State Bank of Saurashtra and State Bank of Indore -- the two banks were merged with the SBI years back -- are not treated at par with the employees of SBI," Venkatachalam said. There will also be adverse impact on fresh recruitment, he said. "The SBI is currently recruiting a good number of staff. With the merger, it will get around 45,000 more staff. As a result the bank will not go for any new recruitment for a long time to come," he added. The need of the hour is to have good and strong banks than a global-sized bank with a bad loan portfolio of around Rs 122,000 crore post merger, Venkatachalam said. The AIBEA has called on about 45,000 employees of the SBI's associate banks to strike work on July 12 to protest the proposed merger. The AIBEA is also supporting another strike planned the next day, on July 13, to be observed by employees of all banks. According to SBI, the net profit of the merged entity (SBI and five associate banks) for the year end March 31, 2016 would be Rs 11,590 crore, capital adequacy ratio 12.66, gross NPA Rs 121,969 crore, net NPA Rs 68,894 crore and restructured advances Rs 94,569 crore.