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Approval for Merger of Associate Banks in SBI
Jun 21, 2016

In the first move to consolidate the country’s struggling public sector banks, the Union Cabinet on approved the merger of State Bank of India (SBI) and its five associate banks. SBI had last month mooted the proposal for merger of its five subsidiary banks with itself and acquisition of the newly set up Bharatiya Mahila Bank.

  • SBI has five associate lenders—State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.
  • With the merger of the network of SBI would stand to increase, its reach would multiply. One can expect efficiencies to be created from rationalisation of branches, common treasury pooling and proper deployment of a large skilled resource base.
  • Currently no Indian bank features in the top 50 banks of the world. With this merger, some visibility at global level is likely to increase.
  • Customers of associates and subsidiaries of the Bank will also be beneficiaries. Any introduction of new technology by SBI would simultaneously be available uniformly.
  • The scale of operations and common cost would get rationalised. The synergies being pooled at one place are going to be a big positive,
  • The merged entity will have an asset base of Rs 37,00,000 crore, 22,500 branches and 58,000 ATMs.
  • It will have over 50 crore customers.
  • SBI has close to 16,500 branches now, including 191 foreign offices spread across 36 countries.
  • SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged with SBI.

SBI has set up a crack team to prepare a framework for amalgamation of five associate banks with itself. A team of 15-20 members has been set up and it has started working on the framework for the merger. The team is headed by a general manager and there are a few deputy general managers. The team has been formed under the supervision of associate and subsidiaries department, which is being headed by managing director V.G. Kannan.


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