Pushing its plan to bring the remaining six associate banks under its fold, State Bank of India (SBI), the country?s largest bank, has announced the initiative on Friday to acquire State Bank of Indore (SB Indore), with a business turnover of Rs 50,000 crore, with itself.

Earlier, in a similar move, the bank has merged State Bank of Saurastra, the smallest associate bank with it in August 2008.

“The board of directors of SB Indore has passed a resolution recommending the merger or acquisition of SB Indore with or by State Bank of India,” SBI informed the Bombay Stock Exchange.

The proposal will be subject to approval by RBI and the governemnt, SBI said.

FE was the first report, on June 11, about SBI?s plans to merge its associate banks with it.

SBI has six associate banks, namely, SBI Indore, State Bank of Travancore, State Bank of Patiala, State Bank of Bikaner & Jaipur, State Bank of Mysore and State Bank of Hyderabad.

The six banks have a branch network of 4,607 and a market share of 6.74% in deposits and 6.95% in advances, as in March 2009.

Earlier OP Bhatt, chairman, SBI, had said: “We are waiting for the new government to be in place to carry on the grand merger of SBI with six of its associates. The process will not take more than three to six months… we have taken the initiative on our own for the merger.”

The SB Indore has 470 branches and an ATM network of 350 at the end of March 2009.

The bank had posted a 19.19 % rise in its net profit to Rs. 278.92 crore in 2008-09. This increase was attributed to the impressive growth in income from forex transactions, net interest income, treasury income, commission income and the control of operating expenses.

The bank?s capital adequacy ratio as per Basel-I & Basel-II, stood at 11.81% and 13.46%, in March 2009, well above the prescribed norms.

SB Indore?s total deposits increased from Rs 24,698.81 crore to Rs. 28,331.98 crore as of March 2009, a growth of 14.71%.

Its gross advances grew 18.47% or by Rs 3,390.36 crore, to Rs 21,746.58 crore last fiscal. The change in focus towards high-yielding advances, coupled with the bank?s efforts to improve the pricing of the credit portfolio, had a salutary effect on the yield on advances, which improved from 10.40 in March 2008 to 10.82 in March 2009.

The bank?s gross NPAs, in March 09, stood at Rs 301.28 crore. The gross NPA ratio declined from 1.44 % in March 2008 to 1.39 % in March 2009.

SBI, with over 12,000 branches, had a net profit of Rs 9,121.23 crore in 2008-09, an increase of 35.55% over the previous year. Its total assets rose 33.66% to Rs 9,64, 432.08 crore, and the loan portfolio, by 30.17% to Rs 5,42,503.20 crore.