India's largest bank is even bigger starting today, with State Bank of India commencing operations in FY18 following the merger of five associate banks and the Bharatiya Mahila Bank.
In an interview to CNBC-TV18, Dinesh Khara, MD- Subsidiaries at State Bank of India (SBI) spoke about the merger and operational plans henceforth.
Below is the verbatim transcript of the interview.
Q: It is an emotional moment for you today, the six-way merger is finally under way effective April 1. How does it feel from here on? What lies next?
A: Of course, today is a historic event for all of us here at State Bank of India and also for the associate banks because today it is a six-way merger which is going through. It gives us an opportunity of becoming one of the top-50 banks across the globe. So, actually it meets our aspirations in becoming one of the leading global banks. This is something, I am sure, each Indian also will be proud of.
Q: Tell us about your combined balance sheet now. You said it will be about Rs 44 trillion. How many branches, how many employees will you have now and what will be the whole transition process? How long will that entire process take for all six banks to become one?
A: Today, by this merger, there would be more than 23,000-24,000 branches. The balance sheet in terms of deposits and advances would be about Rs 44 lakh crore. We would have a very significant number of ATMs on the ground. It would be 59,000 odd ATMs on the ground.
So, I perceive ATM to be one of the major footprints in terms of delivering service to the customers. It is a major event for the State Bank Group today because we are in a position to reach out to about 45 crore population. Now we are banker to about 44-45 crore population which is almost, I would say that we are bankers to every second Indian whosoever would be eligible for opening an account. So that is a kind of a situation.
As I mentioned, it is a very proud moment for all of us for the whole group and we hope to service our customers with the same amount of efficiency and courteousness which we were doing through the associate banks as well as the Bharatiya Mahila Bank.
Q: I was asking about the transition of the bank. Effective April 1, the merger comes into effect. All other five banks plus Bharatiya Mahila Bank becomes State Bank of India. How long will the transition period be?
A: As far as the customer is concerned, for them it makes no difference. It is State Bank of India only, but yes of course, we have got some internal processes in terms of the alignment of the structure because there are many administrative offices through which the branch network of associate banks was being controlled. So, we will be integrating all such kind of administrative offices and we will be actually reducing the kind of duplicity which is there in the administrative structure. So, that piece will take some time.
We will actually start all that after completing the audit process of all these associate banks. So, we expect the audit, etc. to get over by around April 20 and thereafter, we will get on to the rationalisation of the administrative office structure. And also, simultaneously the data merger piece will also happen. We expect data merger as well as the rationalisation of administrative office structure to get complete within May.
Q: Tell us more about this rationalisation you are looking at for branches as well as the ATM network and also the headquarters of the current associate banks, what becomes of them?
A: There used to be five head offices of associate banks, so that will be adding two more local head offices from April 24 and then one would be based out of Telangana, the other would be based out of Jaipur. Other than that, administrative offices would be there, there would be regional offices and we will be rationalising these offices also and as against 241, we will be bringing down to about 168 or something like that. So, that is the kind of effort which we will put in.
Q: 241 local offices?
A: No, it would be the administrative offices which would comprise of the regional offices, which would comprise of administrative offices which will also comprise of networks. So, these were merely administrative structures. These were not really affecting the customer service piece. So, these were essentially the organisational set up for controlling these branches.So, post-merger, since we have the branches across the country, we will have a situation that the same set of geography will be controlled by those administrative offices also. So, we will be actually doing the rationalisation of these offices and avoiding the duplicity of the controlled structure.