The Hindu : New Delhi News : Cabinet nod for merger of bank with SBI

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Cabinet nod for merger of bank with SBI

Special Correspondent

Boards of banks approved merger in August last
New Bill to be introduced in Parliament soon

NEW DELHI: The Union Cabinet has given its nod for the merger of the State Bank of Saurashtra (SBS) with its parent, State Bank of India (SBI), to help to create a bigger entity that could take on global competition.

The proposal had been put in cold storage owing to stiff opposition from the Left-backed trade unions, which also called a strike earlier.

To set the ball rolling, the government will now have to repeal the State Bank of Saurashtra Act, 1950 and thereafter “make consequential amendments in the State Bank of India (Subsidiary Banks) Act, 1959 to remove references to State Bank of Saurashtra wherever it occurs …”

Briefing journalists, Information and Broadcasting Minister Priyaranjan Dasmunsi said the merger would enable SBS to upscale in terms of footprint, manpower and other resources. It would also enable it to face competition arising from globalisation of the economy, apart from augmenting efficiency and enabling better management of risks.

The boards of the parent bank and its subsidiary already approved the merger in August last. The process, now being set in motion, is expected to pave the way for amalgamation of the other associate banks with the SBI.

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