According to the reports, the State Bank of India, the largest PSU lender, advised its staff members and their dependents not to maintain trading or demat accounts with depositories outside of SBI.
A "system of placing restrictions or monitoring mechanisms" was mentioned in the circular, which stipulates that employees cannot open trading or demat accounts with outside service providers "without prior written permission of the officer in charge."
Additionally, the bank has requested that workers submit the quarterly demat account statements for themselves and any family members for verification.
The bank has also notified staff members that they have six months to request permission to keep their current demat and trading accounts open outside of the SBI Group or else close them.
SBI provides demat and trading services through its own subsidiary, SBI Securities. SBI is maybe pushing staff to open demat and trading accounts in their own company to boost the business of SBI Securities.
SBI Securities is a full-service broker. SBI is in direct competition with Edelweiss, Kotak Securities, HDFC Securities, and Motilal Oswal.
In recent years, discount brokers like Zerodha and Groww have captured huge numbers of new investors with extremely low brokerage. All other full-service brokerage providers are struggling to compete with these discount brokerage houses. Unlike SBI Mutual Fund, which is one of the top mutual fund houses in the country, it has Rs 9.21 lakh crore of assets under management (AUM).
SBI instructing their staff to open their and their dependents's accounts at SBI Securities is another tactic to boost their securities business. SBI is trying to take the top position in the brokerage space, which is a tough task when your competition is offering little to no brokerage at all.
