SBI associates merger plans put on hold

State Bank of India (SBI) is taking steps more cautiously while progressing with the planned merger of its six associate banks with itself. SBI chairman OP Bhatt said at present there are no further merger plan on the cards. Recently SBI completed the merger of State Bank of Saurashtra (SBS) with it and post-merger integration is still on.

On being asked about the merger of other associate banks with SBI Mr Bhatt said “Nothing is on the cards.” This is clearly a huge move what the SBI top management used to project on the issue of merger till now.

Earlier SBI management was planning to take steps for merger of State Bank of Patiala and State Bank of Hyderabad with the parent bank. In the meantime, the Union government has started preparing the platform for merger of State Bank of Indore and State Bank of Patiala with SBI. These plans have been delayed.

As per bank insiders information, at present the focus is on tiding over the ongoing financial crisis and economic recession. Therefore, issues like mergers would be taken up later when things get in a better position.

SBI’s merger of all its associate banks with itself is a long-term plan, is to strengthen its presence. After the SBI-SBS merger, SBI has six associate banks in line — State Bank of Patiala, State Bank of Hyderabad, State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Indore and State Bank of Travancore.

According to the SBI chairman the employees of the banking group have now developed a positive attitude towards mergers. This is in spite of the fact that SBI’s employees’ associations have been protesting against the merger. However its associations had supported the SBI-SBS union.

Currently, the bank is busy incorporating its bank operations after the SBI-SBS merger. Mr Bhatt informed the post-merger rationalization will be in the areas like technology, asset management, branch banking and seniority. The chairman is of view that this experience can help the country’s largest banking group in preparing for the proposed mergers when these transpire.

In the meantime, SBI has merged its Mauritius-based subsidiary, Indian Ocean International Bank (IOIB), with SBI International (Mauritius) to strengthen its operations in the African island nation. The new unit has started its operations as SBI (Mauritius).