SBI-SBS merger gets approval from cabinet

State Bank of India and State Bank of Saurashta merger has got the final approval from the cabinet. According to State Bank of India sources merger process will get completed within three months.

SBI Chairman O P Bhatt told the reporters, "We expect to complete the merger before this calender year in the next three months. This would be a good learning experience to proceed to the mergers of other associates".

Other associates which will be in the process of merger are State Bank of Travancore, State Bank of Indore, State Bank of Mysore, State Bank of Bikaner and Jaipur, State Bank of Hyderabad and State Bank of Patiala.

Bhatt informed that State Bank is holding 59.41 per cent share in the government, has enough headroom to raise capital even with a 4 per cent dilution in the holding.

"The holding can be brought down by 8 per cent. Even a 4 per cent dilution will give enough headroom to raise capital," Bhatt said.

In the given financial conditions, the apex bank may go for further tightening in the monetary policy. Bhatt added the central bank might look for a 0.25 per cent hike in its Cash Reserve Ratio or repo rate.