Feb 16, 2017 07:46 AM IST | Source: Moneycontrol.com

Cabinet gives nod to SBI merger with associates

The Cabinet has given approval to the merger of State Bank of India with its five subsidiaries, Finance Minister Arun Jaitley announced on Wednesday.

Moneycontrol Bureau

The Cabinet has given approval to the merger of State Bank of India with its five subsidiaries, Finance Minister Arun Jaitley announced on Wednesday. No decision, however, has been taken on merging Bharatiya Mahila Bank.

The approval paves way for the merger of State Bank of Hyderabad, State Bank of Mysore (SBM), State Bank of Bikaner and Jaipur (SBBJ), State Bank of Travancore (SBT) and State Bank of Patiala with India’s largest bank SBI, in turn creating an approximately Rs 40-lakh crore banking behemoth.

As per the swap ratio announced, SBBJ shareholders would get 28 shares of SBI for every 10 shares. Similarly, SBM and SBT shareholders will get 22 shares of SBI for every 10 shares.

Last year in March, SBI announced its merger with its five associate or subsidiary banks and Bharatiya Mahila Bank (BMB) after the government gave its nod for the merger.

In a post-earnings call last week, SBI chief Arundhati Bhattacharya had said: “We are quite ready and as soon as the government notifies the final order, we will be ready to kick it off. We were planning to do it by March but again because of demonetisation it will probably mean a deferment of a quarter.”

SBI has about 16,500 branches with 191 offices spread across 36 countries. The merger may also mean SBI will rank 45th globally in terms of asset size.

Last week, Jaitley said he is confident that SBI stands to gain a lot under the government's public sector consolidation framework. SBI will be a global player, controlling 25 percent of the Indian banking industry, after the merger with its associate and subsidiary units, Jaitley said in an exclusive interview to CNBC-TV18. (Read here)

Sections
Follow us on
Available On