SBI associates merger: SBBJ to be first one to go by April 1; four more to follow soon

State Bank of Bikaner and Jaipur, an associate of State Bank of India, said on Wednesday that it will be completely acquired by its parent with the start of the next financial year 2017-18, becoming possibly the first of the five units to amalgamate with the giant.

SBI and CREDAI have a common objective of providing housing for all. Each of them will leverage their individual strengths and collaborate in areas which will be beneficial to the sector and the consumers at large.

State Bank of Bikaner and Jaipur, an associate of State Bank of India, said on Wednesday that it will be completely acquired by its parent with the start of the next financial year 2017-18, becoming possibly the first of the five units to amalgamate with the giant.

SBBJ said that the entire undertaking of the bank will be transferred to SBI from April 1, 2017. The government had issued an order on acquisition of the bank by SBI on February 22, CNBC TV18 reported.

Earlier this month, the Union Cabinet had approved the merger of State Bank of India and its five associate banks, paving way for bolstering the business operations of the state-run lending behemoth. The merger of SBI with its associates will lead to operational efficiency within banks and will lead to reduced cost of funds, Finance Minister Arun Jaitley said at a press briefing. “SBI will become a global player post associate bank merger,” he said.

State Bank of India is the country’s largest bank, and has five associate banks, namely, State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Mysore, State Bank of Hyderabad and State Bank of Patiala. The former three are listed, while the latter two are not.

Merging of another state-run lender Bhartiya Mahila Bank into SBI hasn’t been finalised yet.

Earlier last week, State Bank of India Chairman Arundhati Bhattacharya said she expects the merger to be completes in the next financial year 2017-18, as SBI would not want to undertake such as large exercise so close to the end of the current financial year.

The proposed merger would propel SBI into being among the top 50 banks globally, Bhattacharya had said, adding, “We believe we are creating a strong bank with cutting-edge technology.”

You may also like to watch:

The merger was expected to be completed by March 2017, but it got delayed and is now expected in the first half of next financial year. The five associate banks recorded a combined loss of Rs 789 crore in the latest quarter, widening from Rs 181 crore in the year-ago period.

SBI Managing Director P K Gupta had said in an interview with ET Now that the merger would benefit the bank as there is lot of duplicity and lots of processes are same among all the companies.

“There are other savings that will happen,” Gupta said to ET Now, adding that there will be more flexibility in merging of branches and merging of other operations. For instance, instead of running six different treasuries, the combined entity will run one treasury.

 

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express Telegram Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.