SBI Merger With Associate Banks and BMB

SBI Merger With Associate Banks and BMB





SBI_Merger

SBI Merger

State Bank of India started merging its five associate banks and Bhartiya Mahila Bank(BMB) with itself. The five associate banks are State Bank of Bikaner and Jaipur(SBBJ), State Bank of Mysore(SBM), State Bank of Travancore(SBT), State Bank of Hydrabad(SBT) and State Bank of Patiala(SBT). The merger is expected to be completed by May 27, 2017.

Now SBI has joined the league of top 50 banks of world in terms of assests. These consolidation of public sector bank is meant for strengthening of banking sector. Bharatiya Mahila Bank will also be merged. Cabinet approved this merger in June 2016 to make SBI a global sized banks. Bharatiya Mahila Bank was established in 2013. In last three years it has given loan of 192 crore to woman borrowers while SBI group given loan of 46,000 to woman borrowers.

The total customer base of SBI reached 50 crore with 24,000 branches and 59,000 ATMs across the country. The merger will enhance productivity, profitability and increase operational efficiency. This will lead to reduced cost of funds. SBI has lowest cost in funds in the banking sector. Customers of smaller banks will get better loan deals after merger. The asset base of SBI will be five times the asset base of ICICI Bank, its nearest rival..

SBI Merger with its five associated banks and Bhartiya Mahila Bank happened effective from 1 April 2017. The merger involves a lot of IT system changes. So bank first completed annual closing for financial year 2016-2017. Then it started merger from 1st April 2017 which is likely to be completed by the end of this quarter.

In 2008, SBI merged State Bank of Saurastra with itself. Two years later State Bank of Indore was also merged with it. Post mega merger of SBI with five associate banks, some of its branches may be relocated to other areas. This can be done in order to maximize the reach or improve profitability.






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