NEW DELHI: The State Bank of India on Tuesday proposed the merger of its five associate banks and newly created Bharatiya Mahila Bank (BMB) with itself and sought government’s approval for the same. SBI is seeking “in principle sanction” of the Central Government after the boards of the six banks met in Mumbai to discuss the possibility of a merger with its parent bank.
Post the meeting, the associate banks informed exchanges that merger talks with SBI are being initiated for a merger.
The associated banks are State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. The Bharatiya Mahila Bank Ltd is the first of its kind in India, formed with a vision of economic empowerment for women.
Arundhati Bhattacharya, chairperson of SBI was quoted as saying that “the benefits of the merger would be huge. The merger will witness a reduction of lending costs by 100 basis points within a year post this merger.” The five associate banks have a cumulative advances base of `3.78 lakh crore and a deposit base of `5.03 lakh crore. SBI, the parent bank, had advances of `13.91 lakh crore and deposits of `16.71 lakh crore as of the end of the December quarter.
Usha Anathasubramanian, managing director and chief executive officer, PNB had told Express earlier that consolidation was inevitable. “Though the sector counts 27 scheduled commercial banks, not one figures in the global top 20. There’s a need to create 2-3 large Indian banks.”
Meanwhile, a section of employee unions are protested against any such move and are threatening to go on a nation wide strike. All employees of Associate Banks will go on strike on May 20, All India Bank Employees Association (AIBEA) general secretary C H Venkatachalam said. The government recently set up the Bank Board Bureau (BBB) to look into several issues, including consolidation in public sector banking space.
The benefits are huge. Merger will witness a reduction of lending costs by 100 basis points within a year -Arundhati Bhattacharya, Chairperson, SBI
SBI to divest up to 5% of stake in NSE
State Bank of India (SBI) plans to sell part of its holding in National Stock Exchange (NSE), where it owns 15 per cent stake. SBI intends to disinvest up to 5 per cent of its equity holding in NSE through a competitive bidding process, a public notice said. SBI Capital Markets Limited has been appointed as a consultant.