SBI needs capital up to Rs 3,000 cr for subsidiary’s merger

The subsidiary to be merged with SBI has not been identified yet.

Written by PTI | Mumbai | Published: June 22, 2013 12:09:30 pm

State Bank of India today said it will require up to Rs 3,000 crore capital to merge one of its associate banks. SBI will need Rs 1,000-3,000 crore in capital if it were to merge one of its subsidiaries with itself,its Chairman Pratip Chaudhuri said.

He was speaking to shareholders at the bank’s annual general meeting here. The bank has appointed a committee headed by Managing Director S Vishwanath to look into the aspect of merging one of the five subsidiaries,he said.

The subsidiary to be merged with SBI has not been identified yet. “The committee headed by Vishwanath is looking into all the aspects (of merger). That committee would report to the Board and then we will finalise the name (of associate to be merged),” Chaudhuri told reporters after the meeting.

Asked which of the five – State Bank of Patiala,State Bank of Hyderabad (both unlisted),State Bank of Travancore,State Bank of Bikaner and Jaipur and State Bank of Mysore – will be merged in this round,Chaudhuri declined to give an answer,saying the Board will take a call based on the committee’s recommendation.

He also did not say whether a listed or an unlisted associate would be preferred for merger. On SBI’s own capital raising plans,he said a decision in this regard will be firmed up by next month. About the recent depreciation of rupee against the dollar,he said the slide in Indian currency was because of a global trend of money heading back to the US.

“I think its not a reaction to India,it’s a reaction overseas everywhere. Some of the money is headed back to US. All the markets,including those of Britain and Germany,have lost substantially,” he said,adding it affects Indian market more because of our dependence on capital inflows.

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