After over five years of hiatus, associate banks of SBI including State Bank of Bikaner and Jaipur have proposed to merger with the parent lender.
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“This merger discussion is purely exploratory at this stage and not certain”.
According to AIBEA, at the board meetings of the five SBI associate banks held in Mumbai on Tuesday, an agenda was brought to close down the associate banks and for acquisition by SBI.
However, in an interaction with a TV channel, SBI chairperson Arundhati Bhattacharya said that the overall size of the consolidated balance sheet after the merger would be Rs 37 lakh crore against the current size of Rs 28 lakh crore.
With rising bad loans which sucks banks growth capital, analysts and experts were for long calling for merger of small state-run banks and also SBI associates so that a rapidly growing economy can well be oiled.
“We would like to do it as quickly as possible but there are processes involved, including an approval from stakeholders, the central government and the RBI”, she said. Now, the central board of the SBI will take a decision in this connection. “But if we are to be acquired by SBI then it’s going to be a mammoth bank with more than 26,000 branches”, said another official of the union.
SBI is also trying to acquire Bharatiya Mahila Bank (BMB), which was set up as first bank for women in India. Experts point out that the new bank will have increased non performing assets, problems of employee resistance to the merger and costs of merging which could even outweigh the benefits of this move.
This was followed by a nation-wide strike of All Indian Bank Employees Association (AIBEA) in the five banks on Friday.
The employees of State Bank of Travancore (SBT), a subsidiary of the State Bank of India, on Wednesday expressed deep concern over the SBI’s move to merge five of its subsidiaries with itself.
The scrip of State Bank of Mysore zoomed 15.63 per cent to Rs 493.40 and that of State Bank of Travancore jumped 11.4 per cent to Rs 444.60.
State Bank of Mysore also reported a fall of 23 per cent in net profit at Rs 104.86 crore as compared Rs 135.97 crore in the same period a year ago.
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Recently, Minister of State for Finance Jayant Sinha said in a written reply to the Rajya Sabha that any merger initiative has to come from the Board of the banks concerned, and the Government’s role is that of a facilitator.
