The Union Cabinet approved the merger of 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 as well as Bharatiya Mahila Bank with State Bank of India.
Last month, SBI cleared proposal for merger of subsidiary banks and Bharatiya Mahila Bank.
Welcoming the move, State Bank of Travancore MD CR Sasikumar told CNBC TV that it will be a great benefit to the customer. He further added that he doesn’t see any issues on staff integration.
Among the 5 banks, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed. Cheering the news, State Bank of Mysore hit upper circuit and surged 20 per cent to Rs 547.90. State Bank of Travancore was trading 18.14 per cent up at Rs 471.50 and State Bank of Bikaner and Jaipur was quoting at Rs 583.35, up 16.74 per cent against its previous close. Sensex was up 203 points at 26599. Nifty was trading 60.70 points at 8,169.55.
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.
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