New Delhi: Seeking to create a global sized bank, the government today gave go ahead to the merger plan of SBI and its five associate banks but did not take a decision with regard to Bharatiya Mahila Bank.
"The Cabinet had earlier in-principle cleared the (merger) proposal. It had gone to the boards of various banks which have granted the approvals. The recommendations of the boards were considered today and the Cabinet cleared the proposal," Finance Minister Arun Jaitley said.
The associate banks which will be merged with SBI are: State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH).
"With this merger, the SBI, with all these five subsidiaries merging in it, will also become a very large bank, not merely from a domestic point of view but actually a global player in its very size," the minister said after the Union Cabinet meeting.
It will, he added, "certainly lead to far greater efficiency. It will lead to synergy of operations within these banks...it will cut down the cost of operations. The cost of funds itself will come down".
With the merger of all the five associates, SBI is expected to become a global-sized bank with an asset base of Rs 37 trillion (Rs 37 lakh crore) or over USD 555 billion, 22,500 branches and 58,000 ATMs. It will have over 50 crore customers.
State Bank of India has about 16,500 branches, 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 it.
