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Business EconomyPosted at: Aug 18 2016 7:29PM


SBI board approves merger of BMB, 3 associate banks

New Delhi, Aug 18 (UNI) The State Bank of India's board today approved merger of its three associate Banks and Bharatiya Mahila Bank (BMB) with SBI, a move which will make the state-owned lender a bank of global size. It also approved share swap ratio to merge five associate banks and BMB with itself.
The merger plan has been approved subject to approval from the Reserve Bank of India (RBI) and the government of India, SBI said in a notification to the stock exchanges. Last month, the Union Cabinet had cleared merger of all the five associate banks of SBI with the parent and acquisition of BMBL.
As per the filing with the Bombay Stock Exchange (BSE) by SBI, the central board of directors of SBI has accorded their approval to the scheme of acquisition of the State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT) and Bharatiya Mahila Bank Limited (BMBL) by the State Bank of India. But the proposal does not include merger of State Bank of Patiala and State Bank of Hyderabad with SBI.
According to the merger proposal, SBBJ shareholders will get 28 shares of SBI (Rs 1 each) for every 10 shares (Rs 10 each). SBM and SBT shareholders will get 22 shares of SBI for every 10 shares. Bharatiya Mahila Bank, 4,42,31,510 shares of SBI will be swapped for every 100 crore of Rs 10 each.
The idea of merging SBI with its associate banks and BMB was approved by the respective boards of all banks in May. At the time, Arundhati Bhattacharya, chairman, SBI had said that this merger would create a Rs.37 trillion worth entity. That would be more than five times the size of India’s second largest lender, ICICI Bank Ltd, which has a balance sheet of Rs.7.2 trillion.
SBI has close to 16,500 branches, including 191 foreign offices spread across 36 countries. It first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged. With merger of all the five associates and BMBL, SBI will become a global-sized bank and could compete with the largest in the world, with an asset base of Rs 37 trillion (Rs 37 lakh crore) or over 555 billion dollar, with 22,500 branches and 58,000 ATMs. It will have over 50 crore customers.
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