1. Merger with SBI associates will cut costs, improve efficiency: Arundhati Bhattacharya

Merger with SBI associates will cut costs, improve efficiency: Arundhati Bhattacharya

The proposed merger of SBI with its five associate banks and Bharatiya Mahila Bank (BMB) will lead to savings, improve treasury operations and cut redundancies...

By: | Mumbai | Published: May 27, 2016 10:32 PM
call drops Arundhati Bhattacharya said that BMB would bring in Rs 1,000 crore of capital while revaluation of fixed assets of the associate banks would fetch another Rs 700 crore. (PTI)

The proposed merger of SBI with its five associate banks and Bharatiya Mahila Bank (BMB) will lead to savings, improve treasury operations and cut redundancies, its Chairman Arundhati Bhattacharya said today, pegging the cost of the merger process at around Rs 3,000 crore.

“Overall, the merger will be positive for merged entity as it will lead to savings, improve treasury operations and do away with the redundancies,” she said at a news conference here.

The five associate banks are State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.

Earlier, SBI had merged State Bank of Saurashtra and State Bank of Indore with itself.

“We have sought permission from the government to start the negotiations. We tried to assess how the merged entity will look like and there will be no impact on capital and NPAs,” Bhattacharya said.

Arundhati Bhattacharya said that BMB would bring in Rs 1,000 crore of capital while revaluation of fixed assets of the associate banks would fetch another Rs 700 crore.

To a query, she said any merger has its challenges. “We will have to take advantage of that and convert it to an opportunity,” she said, adding that the cost of the merger process would be around Rs 3,000 crore.

  1. K
    Kumar Gupt
    May 28, 2016 at 8:16 am
    We may expect a cut in the operational costs but the enhanced efficiency of the new outfit may not be guaranteed.
    Reply
    1. S
      S.K.Gupta
      May 28, 2016 at 4:19 am
      A slim and trim banking structure may appear to be an epitome of improved efficiency for the outsiders but the merger of all its ociate banks with the SBI may imbibe a host of administrative complexities for the affected staff members who may may be at loss about their respective "Career Progression" in the new regime.
      Reply

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