Shares of State Bank of India subsidiaries surged on the bourses on the back of positive sentiments associated with the Banking Amendment Bill. SBI’s listed subsidiaries State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore closed 13-17 per cent higher on the exchanges after heavy trading.
According to analysts the possibility of positive news coming out from the amendments to the Banking Bill triggered buy interests. The New Banking Bill was supposed to be tabled today in the Lok Sabha. However, the House was adjourned after some members protested against the Government’s move to consider and pass the amendments without adhering to procedural formalities.
“There is no specific reason for the associates of SBI to gain. There was overall positivity in the banking sector because of the Bill. If the Bill is passed there will be new banking licences as well,” said Dipen Shah, Head of Private Client Group Research, Kotak Securities. The Bankex gained 0.31 per cent at the end of the day.
The Bill proposes removing the 10 per cent voting ceiling in private sector banks. “The increase in voting rights has also generated much positivity,” said Kajal Gandhi, banking analyst, ICICI Securities.
Even without the Bill being passed, SBI can consolidate its subsidiaries. It has acquired board approval for the merger of its subsidiaries. Of its five associate banks, State Bank of Hyderabad and State Bank of Patiala are unlisted.
SBI merged State Bank of Saurashtra with itself in 2008. State Bank of Indore was merged with SBI in 2010.