Parliament passes State Banks (Repeal and Amendment) Bill, 2017
Parliament has passed State Banks (Repeal and Amendment) Bill, 2017 to merge six subsidiary banks with State Bank of India after it was approved by Rajya Sabha. The bill already has been passed in Lok Sabha in 2017 Monsoon session of Parliament.
Key Features of Bill
The bill repeals two Acts namely State Bank of India (Subsidiary Banks) Act, 1959, and State Bank of Hyderabad Act, 1956. These two acts had established State Bank of Bikaner, State Bank of Patiala, State Bank of Mysore, State Bank of Hyderabad and State Bank of Travancore. These banks were subsidiaries of SBI. By repealing these two acts, five subsidiary banks will be merged with SBI. The bill also seeks to amend State Bank of India (SBI) Act, 1955 to remove references to subsidiary banks and powers of SBI to act as an agent of the RBI for subsidiary banks.
The Union Cabinet in February 2017 had approved merger of five associate banks along with Bharatiya Mahila Bank with SBI. The purposes of merger were rationalisation of public bank resources, reduction of costs, better profitability, lower cost of funds leading to better rate of interest for public at large and improve productivity and customer service of the public service banks. After the acquisition by SBI, the subsidiaries banks ceased to exist and, therefore, it was necessary to repeal two Acts. The merger had made SBI one of 50 biggest banks of world.
Month: Current Affairs - July, 2018