SBI could become the first Indian global-sized bank. Cabinet gave the go-ahead to the merger plan of SBI and its five associates, a step aimed at strengthening the banking sector through consolidation of public banks.
The associate banks which will be merged with SBI are State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH).
Finance Minister Arun Jaitley said, “The Cabinet had earlier in-principle cleared the (merger) proposal. It had gone to the boards of various banks which have granted the approvals. The recommendations of the boards were considered today and the Cabinet cleared the proposal.”
“With this merger, the SBI, with all these five subsidiaries merging in it, will also become a very large bank, not merely from a domestic point of view but actually a global player in its very size,” the minister said after the Cabinet meeting.
With the merger of all the five associates, SBI is expected to become a lender of global proportions with an asset base of Rs 37 trillion (Rs 37 lakh crore) or over USD 555 billion, 22,500 branches and 58,000 ATMs. It will have over 50 crore customers.
However, no decision was taken on the proposal to also merge the Bharatiya Mahila Bank with SBI.