State Bank of India (SBI) will merge its five associate banks with itself from April 1, in the largest consolidation exercise in the banking history of India.
After the government notified April 1 as the effective date of merger, SBI today said in a regulatory filing, “The assets of State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH) will be transferred to SBI from April 1, 2017.”
With the merger of all the five associates, SBI is expected to become one of the top 50 banks in the world with a balance sheet size of over Rs 32 lakh crore (about USD 500 billion), 22,500 branches and 58,000 ATMs. It will have a customer base of over 50 crore.
In a statement last week, SBI said, “the merger will result in creation of a stronger entity. This will minimise vulnerability to any geographic concentration risks faced by associate banks. This merger is an important step towards strengthening the banking sector through consolidation of public sector banks.”
SBI had earlier said the corporate branches of its five associate banks will “fold up” into the parent bank as part of network rationalisation after their merger. As much as 60-70 per cent of the larger value accounts are common and SBI needed only one relationship manager for that, an official had said.
SBI will soon start the process of data integration, streamlining its IT (information technology) platform, rationalise 20 percent of its branches, integrate its five treasury operations into one and getting the employees on the SBI payscale among other things. The integration should be completed in the first half of FY18.