The merger of State Bank of India and its associate banks will be a win-win for both, with the merged entity gaining more visibility in the global banking landscape, according to Chairman Arundhati Bhattacharya.
The Union Cabinet on Wednesday gave its in-principle nod to SBIs’s proposal to take over its five associate banks.
India’s largest bank holds majority stake in all five associate banks — State Bank of Bikaner & Jaipur (75.07 per cent), State Bank of Hyderabad and State Bank of Patiala (100 per cent each), State Bank of Mysore (90 per cent), and State Bank of Travancore (79.09 per cent). As on March-end 2016, SBI had a business size (deposits plus advances) of ₹31,94,422 crore while associate banks had a combined business size of ₹9,29,697 crore.
“While the network of SBI would stand to increase, its reach would multiply. One can expect efficiencies to be created from rationalisation of branches, common treasury pooling and proper deployment of a large skilled resource base,” said Bhattacharya.
As on March-end 2016, SBI had 16,784 domestic branches, 198 foreign offices spread across 37 countries, and 42,740 ATMs. The associate banks collectively had 6,798 branches and 8,964 ATMs.
The SBI chief said, “Currently, no Indian bank features in the top 50 banks of the world. With this merger, some visibility at the global level is likely to increase…The scale of operations and common cost would get rationalised. Overall, the synergies being pooled at one place are going to be a big positive.”
‘Want fair deal’ Harshavardhan Madabhushi, General Secretary, Associate Bank Officers’ Association, said his organisation wants a negotiated settlement so that associate bank officers get a fair deal.
He referred to the case of officers of erstwhile State Bank of Saurashtra and State Bank of Indore (which were merged with State Bank of India), whose inter se seniority was reduced and career prospects hurt.