TIL Desk Business/New Delhi/ Seeking to create a global-sized bank, the Cabinet on Wednesday gave the go-ahead to the merger plan of SBI and its five associates, a step aimed at strengthening the banking sector through consolidation of public banks. However, no decision was taken on the proposal to also merge the Bharatiya Mahila Bank with SBI.
The merger is likely to result in recurring savings, estimated at more than Rs 1,000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds.
“The Cabinet had earlier in-principle cleared the (merger) proposal. It had gone to the boards of various banks which have granted the approvals. The recommendations of the boards were considered today and the Cabinet cleared the proposal,” Finance Minister Arun Jaitley said in a post-Cabinet briefing.
The associate banks which will be merged with SBI are State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH).
