Cabinet approves merger of 5 associate banks with SBI

The Cabinet has approved the merger of five associate banks with the State Bank of India (SBI), which will catapult any bank from India to among the top 50 global lenders for the first time. The merger does not include Bharatiya Mahila Bank. The five associate banks are State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore.

SBI had cleared the proposal for the merger last May. In June, the Cabinet approved the merger in principle. The proposal then went to the respective bank boards before returning to the Cabinet for a final approval.

The merger will create a bank with a projected asset book of Rs 37 lakh crore by March 31. As of December 2016, the asset book was Rs 33.5 lakh crore. None of the Indian banks are on the list of top global 50 lenders, but with a larger entity, SBI will be the 45th biggest bank in the world.

SBI’s asset base will now be five times larger than its nearest rival ICICI Bank. After the merger, SBI will have 22,500 branches, 58,000 automated teller machines and over 500 million customers.

The five associate banks had a market share of 5.30 per cent in deposits and 5.33 per cent in advances on March 31, 2016. Their net profit stood at Rs 1,640 crore at that time.