Cabinet approves SBI acquisition of subsidiary banks, share prices go uo intraday
The merger will make SBI among the top banks in the world.
On Wednesday, the Union Cabinet, chaired by Prime Minister Narendra Modi approved the acquisition by the State Bank of India of its subsidiary banks, namely State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore.
The Cabinet also approved the introduction of a Bill in Parliament to repeal the State Bank of India (Subsidiary Banks) Act, 1959 and the State Bank of Hyderabad Act, 1956.
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.
Existing customers of subsidiary banks will be able to access SBI’s global network.
It will also result in improved risk management and unified treasury operations.
The SBI in a statement said that it is awaiting a formal notification in this regard from the government indicating the effective date of the merger.
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