State Bank of India moves to merge 5 associate banks | india | Hindustan Times
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State Bank of India moves to merge 5 associate banks

india Updated: Aug 26, 2010 00:48 IST
HT Correspondent

In a clear signal that it was ready to turn a bigger mammoth, the country’s largest lender, the State Bank of India, signalled on Wednesday that it was ready to merge into itself five of its associate banks – which have regional clout and by no means small themselves.

Chairman O.P. Bhatt, responding to rumours that have sent the listed associate banks’ shares up this week, said he will discuss the matter with the government.

The State Bank of Indore has already been folded into the parent and the five up for merger are the State Bank of Bikaner and Jaipur, the State Bank of Hyderabad, the State Bank of Mysore, the State Bank of Patiala and the State Bank of Travancore.

“I will discuss with the government whether we should go ahead with some more banks,” Bhatt told reporters on the sidelines of a Confederation of Indian Industry seminar here.

If the government gives go ahead signal, then it would approach the associate banks for merger. “If the government answer is yes, as we had done in the past, we will talk to the remaining five associate banks,” added Bhatt.

Replying to the question, whether listed banks or the unlisted ones would be merged first, he said, “It doesn’t matter whether it’s listed or unlisted.

What matters is how smoothly we can do it because now we have an experience in terms of modalities—both for listed and unlisted. We can pick either,”

The merger of State Bank of Indore with SBI will formally happen on Thursday. It is expected to be smooth, on the lines of the one with State Bank of Saurashtra, which kicked off the merging in of the sister banks.

Bhatt said he wants all associate banks well capitalised.