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The associate banks of State Bank of India (SBI) will see some delay in loan processing and banking services during the month-end, ahead of their merger with SBI.
“The associate banks have been asked to treat March 25, as a cut-off date for disbursals of their loans and individual banking products to facilitate business transition,’’ a top SBI official told Business Line on Monday.
The Government has already notified that April 1, will be the date for the merger. With this all shares of the associate banks would cease to exist as individual entities and would stand transferred to SBI, according to the gazette notification dated February 22, 2017.
This will mark the end of business as individual entities of the five associate banks — State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Hyderabad (SBH) and State Bank of Patiala (SBP).
While there is no official notification in this regard apparently to avoid any loss of business and migration of customers to other banks, customers are being informed at the branch level about the delay/or temporary halt in businesses, said a senior SBBJ executive.
“The rationale behind the move is to ensure procedural correctness in aspects such as mortgages and legal formalities,’’ explained an official of SBH.
There are also differences among the product offerings of the associate banks and SBI. To ensure uniformity, all individual/customised products of associate banks will be discontinued and the existing products of SBI will be sold by banks.
There is a rush to clear all existing loan proposals and complete disbursals by March 25 by different agencies that work for associate banks.
“We are working over time to get legal opinion on home loan proposals to facilitate approval by the deadline. But not sure if all could be completed,’’ said a senior legal counsel for SBH in Hyderabad.
Meanwhile, bankers insist that there is no need for panic among customers. “It will be temporary delay. Any normal transactions will be hit a little by the annual closing of accounts. The merger procedures will add a little more delay after which every thing will be normal,’’ said SBI official.
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