'Basel III prevented merger of subsidiary'

Oct 07 2013, 03:25 IST
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SummaryChaudhuri specifically pointed to steep salary hike which will have to be given to the employees of the merging subsidiary.

Former SBI chairman Pratip Chaudhuri has said the nationís largest lender would have completed the process of merging a subsidiary but for the huge capital requirement due to the Basel III norms.

ďWe have decided to merge one more subsidiary which we are pretty positive but because of Basel III impact, it is (delayed),Ē Chaudhuri, said here.

State Bank of India had a shortage of capital but now is better placed to merge one of its subsidiaries, he said, adding that in the recent past it was able to merge State Bank of Indore and State Bank of Saurashtra. Chaudhuri specifically pointed to steep salary hike which will have to be given to the employees of the merging subsidiary, which eats into capital base of the parent.

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