Union Cabinet approves merger of 5 associate banks with SBI
The Union Cabinet has approved merger of country’s largest lender State Bank of India (SBI) and its associate banks in order to bring the state-owned entity on a par with global lenders.
5 associate banks of SBI are: (i) State Bank of Bikaner and Jaipur, (ii) State Bank of Hyderabad, (iii) State Bank of Mysore, (iv) State Bank of Patiala and (v) State Bank of Travancore.
Apart from these 5 associate banks, the Bharatiya Mahila Bank (BMM) will also be merged with the SBI.
- The merged entity will increase SBI’s market share from present 17% to 22.5-23% with total business of over 37 lakh crore rupees.
- It will have one-fourth of the deposit and loan market in the country and SBI’s staff strength will increase by 35-49%.
- The merged entity will have nearly 24,000 branches and increase SBI’s network by 6,000 branches.
- It will also have strong network of about 58,700 ATMs across the country as of March 2016-end and shall employ around 2.85 lakh people in 2014-15.
The merger move of SBI and its associate banks comes after the Union Government had announced a road map for bank consolidation during Union Budget of year 2016-17. This was seen as necessary to meet the huge infrastructure financing needs of the country. This merger also seeks to feature Indian Bank in the top 50 banks of the world in terms of size as currently no bank in the country features in it.
Month: Current Affairs - June, 2016