SBI to merge with associate banks on April 1st
Posted on: 24/Feb/2017 10:35:11 AM
April 1st will be the record date for the merger of State Bank of India (SBI) with five of its associate banks. The associate banks 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).
The government had issued a gazette notification dated 22 February that said that all shares of these associate banks would cease to exist as individual entities and would stand transferred to SBI. According to reports, after the merger, SBI is set to be among the top 50 large banks of the world. SBI was ranked 52 in the world in terms of assets in 2015, and a merger will see it break into the top 50.
The notification said, In the case of SBP and SBH, which are not listed on the stock exchanges, the entire share capital would, without any further act, deed or instrument, stand cancelled. Also, the share certificates representing such shares would also, without any further act, deed or instrument, be deemed to be automatically extinguished.
Speaking about this, Chairperson of SBI Arundhati Bhattacharya said, The next course of action is to enact the swap of shares for all the shareholders of the associate banks. The time period required for that is 30 days, so we will focus on that. After the audit of all banks is completed on 31 March, we will begin the granular merging of each bank. That should take about six weeks, since we will only be able to do it on weekends. By end of May we should have merged at a granular level. In about a month or two after that, we will also complete the rebranding of all branches.
The consolidated balance sheet of the merged entity would be Rs 32 trillion. The merged entity would have deposits worth Rs 26 trillion and nearly Rs 18.76 trillion worth advances on its books. Employees of the associate banks would be offered adequate wages in the merged entity. At this point, there are no wage-related issues. The finance minister also asserted that the wages that people receive now will be protected. The employees of the associate banks will be offered the wage package that our people have for the relevant grades. Its up to them to either accept that or retain the package they have now. They have a choice to do that.
