We had earlier reported that the State Bank of India is looking forward for a merger with its associate banks and now this merger seems to be a reality as the Union Cabinet has finally approved the merger of SBI with its associate banks and the State Bank of India also happens to be the largest lender in India.
Merger of the associate banks with SBI will undoubtedly make the State Bank of India one of the important banks in the world as this bank is expected to come on par with the global lenders. Established on the 1st of July, 1955, SBI has indeed come a long way from what it used to be.
Read this article to know more about the merger of the State Bank of India with its associate banks and its consequences.
Also read – Merger Begins of SBI and its Associate Banks
Union Cabinet’s approval of the merger of State Bank of India with its associate banks – Effects
With this merger of State Bank of India with its associate banks, the entity will see a rise in the asset base which will be about Rs. 37 lakh crore. Moreover, there will be about 58, 700 ATMs apart from 24, 000 branches across India. The total number of customers are about 50 crore as of now. These numbers are sure to change soon.
Win – win situation & global visibility for SBI
SBI chairperson, Ms. Arundhati Bhattacharya also stated that the merger of SBI & its associate banks will definitely be a happy moment for not only the associate banks but also SBI. This merger aims at increasing its visibility not only in the world but also in India as after the merger, this bank would be seen multiplying and growing in leaps & bounds.
In addition to this, there shall be a few changes which will certainly help SBI increase its base. The changes that will take place or the benefits of this merger are – common treasury pooling / branches to be rationalised / resource base to improve as the talented people will be working under one roof.
Technology, the best bet
What makes the merger of SBI with the associate banks more special is the fact that even a small change or addition would immediately be implemented across the nation as the base is the same. Thus, there will be less confusion and many good results. Merger of SBI with the associate banks had started almost 8 years ago when the State Bank of Saurashtra merged with State Bank of India way back in 2008.
And 2 years later that is in 2010, even the State Bank of Indore was merged with a bigger bank. Though the scheme on the merger had been tried over the years still it could not see the light of the day because there was a shortage of the capital. However, things turned out in the favour of State Bank of India after a while.
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Rise in the shares
Once the Union Cabinet had announced the merger, shares of the associate banks of SBI witnessed a sharp rise in the shares. Associate banks such as State Bank of Bikaner & Jaipur / State Bank of Travancore / State Bank of Mysore had risen by 20 % while SBI’s shares were up by 3 .9 %.
Future of the State Bank of India & associate banks merger
Now it is to see as to what will the future hold for State Bank of India once the merger has completed its procedure. And how will SBI grow in the years to come.
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