The Cabinet is likely to clear the merger of State Bank of Saurashtra with the State Bank of India in the next two weeks. The clearance of the proposal is seen as a step, which is set to put the consolidation exercise back on track.
Sources said that SBI is keen to merge ?a few more? associate banks with itself. ?However no concrete proposal has been sent to the government on further mergers,? an SBI insider said. Other banks are State Bank of Mysore, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Indore and State Bank of Patiala and State Bank of Travancore.
However, it may not be easy for the government to carry on the merger exercise. The trade unions have already said that they would go on an indefinite strike in February if the government goes ahead with the merger process. P Chidambaram has already underlined the need follow a consolidation policy among PSU banks. However, no concrete steps have been taken due to protests from trade unions. He said that consolidation would be key for survival for these banks as post 2009 as they need to gear up to face stiff competition from foreign and private sector banks.