State Bank of India (SBI) will merge with its five associate banks, these are State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Hyderabad (SBH) and State Bank of Patiala (SBP).
After the merger on April1, SBI will become the top 50 largest banks of the world and the shares of its associated banks will cease to exist as individual entities.
The merger is likely to result in recurring savings, estimated at more than Rs 1,000 crore in the first year, through a combination of enhanced operational efficient and reduced cost of funds. Existing customers of subsidiary banks will benefit from access to SBI’s global network. The merger will also lead to better management.
This acquisition of subsidiary banks of State Bank is said to be an important step towards strengthening the banking sector through consolidation of public sector banks.
“The five associate banks of State Bank of India (SBI) will soon come out with a voluntary retirement scheme (VRS) as their boards have approved the a scheme. The scheme will be introduced and closed before April 1, 2017, the day on which the merger takes into effect,” said by General Secretary of All India Bank Employees’ Association (AIBEA).