A civil society forum on banking is concerned about an internal State Bank of India circular that seeks to put a check on employees and their dependants from opening demat accounts outside the State Bank group without its permission.

In an internal circular to the chief general manager of the local head office of all circles of SBI on May 27, the bank said it has observed many of its employees were opting for demat accounts outside the State Bank group on account of options available with new trading platforms.

“No officer/award staff shall open their or their wholly dependant family member’s demat account and/or trading account outside the SBI group without prior written permission of his/her controller, not below rank of chief general manager,” the circular said.

Moreover, the employee will have to submit their and their wholly dependent family member’s demat/trading account statement on a quarterly basis to their controllers.

A period of six months from the date of the circular is available for the employees to obtain post facto permission for continuing with their and their dependant’s existing accounts or close the same.

A breach of these instructions will be considered as misconduct under various clauses of State Bank of India Officers’ Service Rules and Award Staff Conduct Rules, the circular said.

SBI had an employee base of 2,32,296 as of March 31 comprising officers, associates, subordinate staff and others, according to the bank’s annual report. An email sent to SBI on the rationale for issuing this circular is yet to generate a response.

“This circular is another example of restrictive HR policies. The bank has already imposed limitations on employees under the NPS scheme, compelling them to invest solely in SBI Pension Fund despite potentially higher returns offered by other funds,” said Biswaranjan Ray and Soumya Datta, joint convenors of Bank Bachao Desh Bachao Manch. “This directly impacts employees’ ability to maximise their benefits,”it said.

Banking sources, however, said that disclosure requirements related to demat and trading accounts are already prevalent in private sector and foreign banks.

Demat boom

The total number of demat accounts in the country has increased from 116 million in April 2023 to 154 million in April 2024, according to data compiled by Motilal Oswal Financial Services.

The report further said that Groww, Zerodha and Angel One were the top three brokers by market share.