Cabinet OKs SBI merger with 5 associates

Wednesday 22nd February 2017 05:10 EST
 

The Central government has approved the merger of State Bank of India and its five associate banks, making way to strengthen business operations of the lending major. Speaking at a press conference, India's Finance Minister Arun Jaitley said, "SBI will become a global player post associate bank merger." He said the proposed merger of Bhartiya Mahila Bank into SBI is still under consideration and the decision has not yet been taken by the Cabinet.

He also added that the merger will prompt operational efficiency within banks and lead to reduced cost of funds. The merger was expected to be completed by March 2017, but got delayed and is now expected in the first half of next financial year. Country's largest bank, the State Bank of India, now has five associate banks namely, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore, State Bank of Mysore, and State Bank of Patiala. Earlier last year in March, SBI announced that it would merge its five subsidiaries and Bharatiya Mahila Bank once it gets government approval.

SBI Managing Director PK Gupta said the move would benefit the bank as there was lot of duplicity and lots of processes are same among all the companies. "There are other savings that will happen," Gupta said. He added that now there will be more flexibility in merging of branches and merging of other operations.


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