The government is likely to extend the tenure of State Bank of India (SBI) chairman Arundhati Bhattacharya by a year to ensure smooth merger of the bank\u2019s five associate banks and Bharatiya Mahila Bank, finance ministry sources told FE. Bhattacharya\u2019s three-year tenure at the helm of the country\u2019s largest lender by assets began on October, 2013. Currently, the SBI brass comprises the chairman and four managing directors \u2014 B Sriram, VG Kannan, Rajnish Kumar and PK Gupta. Officials said an extension to Bhattacharya would help the government complete the merger process of SBI within the current fiscal. The Appointments Committee of Cabinet is expected to take a final decision on the extension of Bhattacharya\u2019s tenure soon. On June 15, the Cabinet gave an in-principle approval to SBI\u2019s proposal for the merger, which would place it among the world\u2019s top 50 banks in terms of assets. After working out the scheme of amalgamation, SBI would soon seek the final approval from the Cabinet. The merger will result in a consolidated entity commanding a deposit base of over R21.5 lakh crore or nearly a fifth of the banking system\u2019s total deposit base of R97 lakh crore. \u201cThe merger of SBI and its associate banks is a win-win for both. While the network of SBI would stand to increase, its reach would multiply. One can expect efficiencies to be created from rationalisation of branches, common treasury pooling and proper deployment of a large skilled resource base,\u201d Bhattacharya said after the Cabinet approved the merger last month. While mergers of banks have traditionally been opposed by employee unions, Bhattacharya, who is said to have a good rapport with the unions, could help convince them of the benefits. Besides addressing manpower issues, the integration will pose potential challenges such as diverting the management\u2019s attention from improving asset quality and increasing low-cost deposits to managing the merger. In FY16, SBI\u2019s gross non-performing assets (GNPAs) rose over 73% to close to Rs 1 lakh crore. Earlier this month, the government infused R7,575-crore capital in SBI after factoring in the rise in NPA level and loan growth prospects.