Moneycontrol
Mar 20, 2017 08:55 PM IST | Source: Moneycontrol.com

Cabinet approves SBI merger with Bharatiya Mahila Bank

BMB’s total business of Rs 2,000 crore and its 103 branches will be merged with the country’s largest bank soon.

Cabinet approves SBI merger with Bharatiya Mahila Bank

Beena Parmar

Moneycontrol News

The Union Cabinet has approved the merger of Bharatiya Mahila Bank (BMB) with State Bank of India.

BMB’s total business of Rs 2,000 crore and its 103 branches will be merged with the country’s largest bank soon.

The approval comes after last month’s Cabinet approval for the merger of SBI’s five associate banks with the larger entity, which will be effective from April 1.

The Finance Ministry said the SBI group already has 126 exclusive all-women branches across the country while the Bharatiya Mahila Bank (BMB) has only seven.

"The proportion of administrative and managerial cost in the BMB is much higher to reach the same coverage. For the same cost, a much higher volume of loans to women could be given through the SBI," it said.

The government will soon send a formal notification to SBI in this regard.

At present, SBI has an exposure of more than Rs 46,000 crore to women customers. In the three years since the BMB was established in 2013, it has extended loans of Rs 192 crore to women borrowers.

“Although the addition of 103 branches of BMB and business of approximately Rs 2,000 crore would not make significant impact on the branch network and business levels of SBI, it will be ensured that the merger strengthens and reinforces SBI’s focus on financing of women entrepreneurs in order to fulfil the objectives behind setting up of Bharatiya Mahila Bank,” SBI said in a statement.

Along with the merger of the five associate banks with SBI, this merger constitutes an important step towards strengthening the Indian banking sector through consolidation of public sector banks.

 
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