1. Narendra Modi-led Cabinet clears State Bank of India, associates merger; Bharatiya Mahila Bank case hangs in balance

Narendra Modi-led Cabinet clears State Bank of India, associates merger; Bharatiya Mahila Bank case hangs in balance

The Cabinet on Wednesday approved the merger of five associate banks with State Bank of India (SBI), paving the way for the first such wide-scale consolidation exercise to create a banking behemoth.

By: | New Delhi | Published: February 16, 2017 7:10 AM
sbi-so-admit-card-b The Cabinet also set the ball rolling to operationalise the much-awaited discovered small fields as it approved awarding 31 contract areas.

The Cabinet on Wednesday approved the merger of five associate banks with State Bank of India (SBI), paving the way for the first such wide-scale consolidation exercise to create a banking behemoth.

State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore, State Bank of Mysore and State Bank of Patiala will now be merged with SBI, finance minister Arun Jaitley said after the Cabinet meeting. A time frame for the proposed amalgamation will be announced in due course, he added. The Cabinet, however, hasn’t yet taken up a proposal for the merger of Bharatiya Mahila Bank with SBI, although such a move is under consideration, he added.

The Cabinet also set the ball rolling to operationalise the much-awaited discovered small fields as it approved awarding 31 contract areas.

The Cabinet on Wednesday approved the merger of five associate banks with State Bank Of India (SBI), paving the way for the first such wide-scale consolidation exercise to create a banking behemoth.

State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore, State Bank of Mysore and State Bank of Patiala will now be merged with SBI, finance minister Arun Jaitley said after the Cabinet meeting. A time frame for the proposed amalgamation will be announced in due course, he added. The Cabinet, however, hasn’t yet taken up a proposal for the merger of Bharatiya Mahila Bank with SBI, although such a move is under consideration, he said.

SBI chairperson Arundhati Bhattarcharya said last week that the proposed merger would miss the deadline of March 2017 due to the demonetisation of R1,000 and R500 notes in November last year. The country’s largest lender had last year announced the merger of the associate banks as well as the Mahila Bank into itself by March 2017, which was touted as one of the biggest decisions in the banking sector since the nationalisation move in the 1970s. The combined entity was estimated to have an asset book of around Rs 37 lakh crore.

According to the plan, announced by the SBI last year, the country’s largest lender was to give 28 of its shares for every 10 shares held of State Bank of Bikaner and Jaipur, 22 shares for every 10 shares held of State Bank of Mysore and State Bank of Travancore.

SBI’s net profit more than doubled in the third quarter of this fiscal, thanks to a 59% jump in other income and lower bad loan provisions.

The Cabinet also approved a proposal to introduce a Bill in Parliament to extend the jurisdiction of the Collection of Statistics Act, 2008, to Jammu & Kashmir, aimed at strengthening data collection in the state.

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