The merger process of State Bank of Saurashtra (SBS) with State Bank of India (SBI) will take at least three months. The final approval for the merger was given by the government on Thursday.
An SBI official who didn’t want to be identified told FE that the merger process had already started though the final approval of the government was being awaited “It may take three months from now for the completion of the entire merger process,” he said.
The very idea behind the merger move was to enhance the size of the SBI’s balancesheet, which is already the largest lender in the country. The merger will also add profitability of the bank ahead of the opening of the banking sector next year. The official said that though the size of the balancesheet of the SBS was not big, still it was all set to make the size of the SBI the bigger one.
As both the banks are already on the core banking solutions platform and the persons are more or less the same ones, the merger process was not likely to be difficult, said the official. State Bank of Hyderabad is the next associate bank, which is likely to be merged with SBI. However, the bank’s managing director, Renu Challu, declined to comment anything on the matter.
SBI has long term plan to merge all its seven associate banks, which together can give rise to the second largest bank in the country with itself.