Favouring consolidation in the public sector banking space, Finance Minister Arun Jaitley on Monday, said the government as of now is looking only at SBI merging five subsidiaries as well as Bharatiya Mahila Bank with itself and a decision on this will be taken soon.
“We are looking at SBI proposal at the moment. It is with the government to respond. I have indicated that in the budget itself,” Jaitley said, after a meeting with the heads of public sector banks and financial institutions here.
“We are expecting approval shortly,” he said when asked as to how soon the government nod is expected. Last month, SBI cleared the proposal for merger of subsidiary banks and Bharatiya Mahila Bank. It sought government’s approval for the merger.
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The country’s largest lender has five associate banks, State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. Among these, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed. The merger will create Rs 37-lakh crore banking behemoth with over 50 crore customers.
SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged. SBI has maintained since then that it would merge others as well but none of its moves fructified due to lack of capital (which was pegged at least Rs 2,000 crore each for per bank) and stiff opposition from employee unions.
The merged entity will create a banking behemoth, which can compete with the largest in the world, with an asset base of Rs 37 trillion (Rs 37 lakh crore) or over USD 555 billion, with 22,500 branches and 58,000 ATMs as of December 2015. SBI alone has close to 16,500 branches, including 191 foreign offices spread across 36 countries.