1. Mahila Bank, SBI merger took effect from April 1: Government

Mahila Bank, SBI merger took effect from April 1: Government

The amalgamation of Bharatiya Mahila Bank (BMB) with State Bank of India (SBI), approved by the Cabinet on March 15, took effect from April 1, the government said on Friday.

By: | New Delhi | Published: April 8, 2017 4:05 AM
The amalgamation of Bharatiya Mahila Bank (BMB) with State Bank of India (SBI), approved by the Cabinet on March 15, took effect from April 1, the government said on Friday.

The amalgamation of Bharatiya Mahila Bank (BMB) with State Bank of India (SBI), approved by the Cabinet on March 15, took effect from April 1, the government said on Friday.

“The merger is aimed at economies of scale and operational efficiency leading to improved supervision process, compliance and productivity in addition to better risk management,” minister of state for finance Santosh Kumar Gangwar told the Lok Sabha.

The objectives of affordable credit to women as well as propagation of women-centric products need to be quickly achieved through a wider network and lower cost of funds, the finance ministry had said last month.

In the three years since BMB was established, it has offered loans of `192 crore to women, while the SBI group has provided loans of about `46,000 crore to women. BMB has 103 branches, while SBI has more than 20,000 branches and the lowest cost of funds in the banking sector.

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In February, the Cabinet had also approved the merger of five associate banks with SBI, paving the way for the first such wide-scale consolidation exercise to create a banking behemoth. The merger of these subsidiaries — State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore, State Bank of Mysore and State Bank of Patiala—with SBI became effective from April 1.

The decision to amalgamate BMB with SBI was also taken in view of the advantage of the large network of SBI. As many as 22% of SBI’s total staff of around 2 lakh employees are women. SBI group already has 126 exclusive all-women branches across the country while BMB has only seven. The proportion of administrative and managerial cost in BMB is much higher to reach the same coverage. For the same cost, a much higher volume of loans to women could be given through SBI.

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