The recent proposal of SBI to merge its five associate banks with itself and acquire Bharatiya Mahila Bank is in compliance with the government's policy of consolidation, said Finance Minister Arun Jaitley after it sought the government's approval.
“Consolidation was part of the Indradhanush package. I had announced about consolidation in the Budget... therefore, the banks have acted. It is accordance with the government's policy,” he said. “Let the proposal come to the government. I had already announced consolidation as the road map in the Budget itself. And therefore, I think the larger question is that India doesn't need so many banks in the public sector,” Jaitley said in an interview. “Let larger global-sized institutions come into existence without adversely impacting the employees' working conditions. And if it comes to us, I will certainly look at that. And I will look at it very positively.”
SBI Chairman Arundhati Bhattacharya said with the merger, the balance sheet size of the bank will soar to Rs 37 Lakh Crore, from the current Rs 28 Lakh Crore. The five associate banks under proposal for the merger with the major are State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Travancore. When asked if more lenders are expected to come out with similar consolidation plans, Jaitley said, “I think the immediate priority with regard to other banks is to get them out of the stress situation, improve on their economic health and then look at a possible consolidation, wherever possible.”
