Cabinet may approve 5 associate bank merger with SBI today: Srcs

In a major development, the Cabinet is likely to approve merger of the five associate banks with State Bank of India (SBI) on Wednesday. The five associate banks include State Bank of Hyderabad, State Bank of Travancore, State Bank of Mysore, State Bank of Bikaner and Jaipur and State Bank of Patiala.CNBC-TV18 also learns that the Cabinet may approve merger of Bharatiya Mahila Bank to the entity today. Owing to the news, stocks of State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are trading higher in the day's session.The merger will not create any asset quality problem for the parent bank, says Siddhartha Purohit of Angel broking, adding, this will give the top management more control in these subsidiary banks. Though these associate banks’ capital adequacy is a little lower than SBI's, it is still in comfortable zone compared to other PSU banks.However, he also adds that the real synergy will take time to materialize. Watch video for more