The State Bank of India (SBI) is set to kick off the merger process of five of its associates along with Bharatiya Mahila Bank (BMB) starting from 1 April, with expectations for completion within three months.
Rajnish Kumar, Managing Director of SBI's national banking group, disclosed that the bank has requested a three-month timeline from the Reserve Bank of India (RBI) for the merger process. He expressed confidence that the integration would be achieved within this timeframe.
Kumar outlined that the merger would be executed in phases, involving the integration of data, issuance of new passbooks and cheque books and the overall integration of various banking functions, which he estimated to take around three months.
Regarding the consolidation, Kumar highlighted the need for rationalisation due to duplications, anticipating the closure of approximately 1,500 branches. He clarified that the closures could involve branches from either SBI or its associate banks, depending on their locations.
The Indian government has already granted approval for the merger of several entities including State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP), State Bank of Hyderabad (SBH) and BMB.
Upon the completion of the merger process, SBI is expected to emerge as a global lender with a substantial asset base exceeding Rs 37 trillion (approximately USD 555 billion), along with a vast network of 22,500 branches and 58,000 ATMs, serving over 50 crore customers.
This initiative follows previous mergers undertaken by SBI, including the absorption of State Bank of Saurashtra in 2008 and State Bank of Indore in 2010. The board of SBI has already approved the merger plan, with shareholders of SBBJ, SBM and SBT set to receive shares of SBI in exchange for their holdings.
SBI had previously sanctioned separate acquisition schemes for State Bank of Patiala and State Bank of Hyderabad, with no cash outlay or share swap involved as they are wholly-owned by SBI.
