Cabinet had approved amalgamation of five associates of SBI but merger of BMB was not considered due to issues.
New Delhi: The government is expected to give inal approval to the merger of Bharatiya Mahila Bank with the country's largest lender SBI within three months. The Cabinet last month approved amalgamation of five associates of SBI with the parent but the merger of Bharatiya Mahila Bank (BMB) was not considered due to some issues, sources said.
"Now it a is matter of time. The final approval from the Cabinet should come within three months," a source said. The Union Cabinet has already given in-principle approval to the merger of BMB with State Bank of India (SBI).
With the final approval, the first round of consolidation of public sector banks would be over. According to sources, the next round of consolidation in the PSU banks would begin after these six lenders are integrated with SBI.
BMB, set up in 2013, has 103 branches with its presence in almost all the states. The total business of the bank is about Rs 1,600 crore with Rs 1,000 crore of deposits and Rs 600 crore of advances, majority of which is retail business, according to the bank's website.
Integration process of all the five associates with SBI would start from April 1 as part of the largest consolidation exercise in the banking history of India. The assets of State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH) will be transfered to SBI from April 1, 2017.
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. Of the five subsidiary banks, SBBJ, SBM and SBT are listed. The board of SBI earlier approved the merger plan under which SBBJ shareholders will get 28 shares of SBI (Re 1 each) for every 10 shares (Rs 10 each) held. Similarly, SBM and SBT shareholders will get 22 shares of SBI for every 10 shares. The shares of the listed associates will be delisted from stock exchanges following the merger.