The State Bank of India (SBI) board on 18 August 2016 approved merger of its five associate banks and Bharatiya Mahila Bank (BMB) with itself.
Apart from the BMB, the 5 associate banks that will be merged with the SBI are -
i. State Bank of Bikaner and Jaipur
ii. State Bank of Hyderabad
iii. State Bank of Mysore
iv. State Bank of Patiala
v. State Bank of Travancore
Further, the board also finalised the share swap ratio for three of the listed subsidiaries and Bharatiya Mahila Bank.
The listed subsidiaries of the SBI are - State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore.
Highlights of the merger
• The merger will create a behemoth with an asset base of 37 lakh crore rupees or over 555 billion US dollar.
• The merged entity will have 22500 branches and 58000 ATMs serving a customer base of over 50 crore.
• SBI has close to 16500 branches, including 191 foreign offices across 36 countries while the five subsidiaries have nearly 6000 branches.
• The merger necessitates changes in various acts that govern the functioning of the SBI and its subsidiary banks - which require Union cabinet approval.
• The merger will make SBI as one of the top 50 banks in the world as currently no Indian bank features in the top 50 banks of the world.
• The country's largest lender SBI had seven associate banks, of which it has merged State Bank of Saurashtra and State Bank of Indore with itself over the last 10 years.
• The parent bank had advances of 15.09 trillion rupees and deposits of 17.31 trillion rupees as of the end of the March quarter.
• Bank consolidation was proposed by the Union Government in March 2016 at a congregation of bankers and government officials where various issues pertaining to banks were discussed.
• In June 2016, the Union Cabinet gave its approval for the merger.
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