State Bank of India (SBI)’s plan to merge five subsidiaries and Bharatiya Mahila Bank (BMB) with itself could be pushed to FY18 as the bank is awaiting government notification.
“Probably, by a quarter or so. The reason is we still have to get the government approval,” SBI chairman Arundhati Bhattacharya said on Monday.
According to her, doing things in the last quarter is never a very wise thing because there would be a lot of IT system changes, and normally by mid-February the bank closes down all IT system changes.
“As you know, sometimes IT system can impact something else quite unknowingly. So we don’t want to take any risk at the annual closing time and may want to do the annual closing and then look at it,” Bharracharya explained.She said that the timeline will be finalised after the government notifies the merger.
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It can be noted that the bank had announced the merger in May and its central board of directors had in August approved the process along with the share swap ratio for three of the listed associate banks and Bharatiya Mahila Bank.
At that time, it was announced that the merger would be completed by the end March 2017.
The size of the balance sheet of the consolidated bank will be around R37 lakh crore from R29 lakh crore at present. “The (merger) process will start by October-end. The grievance committee will come to us hopefully by September end, after that we have to send it to the Reserve Bank and then to the government, which may probably take a little time of about a month; and then it will come to us. After that, we will have to make an offer to employees and then give them four weeks time and then the merger can take place,” Bhattacharya had told agencies in an interview.
The five subsidiaries of the bank are State Bank of Mysore (SBM), State Bank of Bikaner and Jaipur (SBBJ), State Bank of Patiala (SBP), State Bank of Travancore (SBT) and State Bank of Hyderabad (SBH).
SBI had earlier merged two subsidiaries — State Bank of Saurashtra in 2008 and State Bank of Indore in 2010 — and the process had taken about 55 weeks.
Bharatiya Mahila Bank was created by the erstwhile UPA government to lend primarily to women.