Thursday, August 26, 2010

SBI looking for merger of 5 associate banks into itself

Country’s largest lender State Bank of India is looking for the merger of five of its associate banks into itself. The five associate banks are powerful at the state levels. Chairman O.P. Bhatt, in a reply to the rumors said he will take up the matter with the government. On the other hand after this rumor, this week the shares of the listed associate banks’ have moved up.

Meanwhile the State Bank of Indore has already been merged with the parent bank the remaining five associates which are up for merger are the State Bank of Bikaner and Jaipur, the State Bank of Hyderabad, the State Bank of Mysore, the State Bank of Patiala and the State Bank of Travancore.


Bhatt while speaking on the sidelines of a Confederation of Indian Industry seminar told reporters, “I will discuss with the government whether we should go ahead with some more banks.”

If the government approves the merger of five associate banks then SBI will approach the associate banks for this. Bhatt said, “If the government answer is yes, as we had done in the past, we will talk to the remaining five associate banks.”

When asked from the listed banks and the unlisted ones which will be merged first, he replied, “It doesn’t matter whether it’s listed or unlisted. What matters is how smoothly we can do it because now we have an experience in terms of modalities—both for listed and unlisted. We can pick either.”

On Thursday finally the merger of State Bank of Indore with SBI will take place. It is expected everything will move smooth as it happened during the merger of State Bank of Saurashtra with its sister banks.

Bhatt added he want all associate banks of SBI should be well capitalized.

Wednesday, August 25, 2010

State Bank of Indore branches will become SBI branches from Aug 27

From August 27 onwards, all branches of State Bank of Indore will start functioning as those of State Bank of India (SBI).

The Reserve Bank of India said in a statement, "All branches of State Bank of Indore will function as branches of State Bank of India from August 27, 2010. Customers, including depositors of State Bank of Indore will be able to operate their accounts as customers of State Bank of India with effect from August 27."

A month-and-a-half earlier, the union cabinet approved the merger between State Bank of Indore with its parent SBI, with an aim to help the country’s largest lender to increase its operations and cut costs.

The apex bank added, "The order of acquisition will be effective on and from the close of business on August 26, 2010."

In July the government had issued the 'Acquisition of State Bank of Indore order 2010', according to which the process of amalgamation is to begin from August 26.

Last year, the central board of SBI had given approval for the merger, after this the Centre also gave an in-principle approval.

SBI holds 98% stake in State Bank of Indore, which is having 503 branches, including 437 crore banking branches and 66 branches for NRI services.

After this merger the competition between two entities will also come to end and will lead to easier access to funds at competitive rates.

After this merger SBI will have five associate banks - State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.

While the State Banks of Bikaner and Jaipur, Mysore and Travancore are listed companies.

Monday, August 23, 2010

SBI and nationalized banks authorized to accept I-T dues

Now you can pay your income tax (I-T) dues at different branches of the State Bank of India (SBI) and nationalized banks. These banks have been authorized to accept payment of income tax dues in cash or by cheque.


According to press release issued by the public accounts department (PAD), Reserve Bank of India (RBI), these arrangements have been made for the public so that they can easily pay their I-T dues. For the convenience of assesses the list of branches has been displayed in the banking hall of the RBI and it will also be available with the PAD.

Monday, August 16, 2010

SBI raises BPLR and deposit interest rates

State Bank of India, the country’s largest lender has raised its benchmark lending rates by 50 basis points to 12.25 per cent, thus home, vehicle and other corporate loans linked with the rate become costlier for the existing borrowers. For the new borrowers bank has set the base rate at 7.5 per cent.

The bank has also raised its deposit rates by up to 150 basis points across various maturities.

Before this various lenders had raised lending as well as deposit rates after the Reserve Bank of India had increased its key rates to control rising prices.

SBI said a filing to the Bombay Stock Exchange, “The bank has revised the benchmark prime lending rate upwards by 50 basis points from 11.75 per cent p.a. to 12.25 per cent p.a. effective from August 17.”

In case of fixed deposits on maturity between 15 to 45 days SBI has raised rates by 1.5 per cent to 4 per cent per annum, this is the highest raise done by the bank among various maturity term deposits.

For tenures between 181 days to less than 1 year the new interest rate will be 6 per cent against existing 5.25 per cent, while for 555 days fixed deposit rate has been set at 7.25 percent, an increase of 1.25 per cent.

On maturity between 3 years to 5 years rates have been raised by 75bps to 7.25 per cent, while for 5 years to 8 years slab the rates have been raised by 25 bps to 7.50 per cent. The revised deposit rates will come into effect from tomorrow.

The bank has also announced that it will be launching floating fixed deposit product linked with base rate with effect from September 6, 2010.

SBI said in the filing, “The bank announced launching of floating rate term deposit products linked to ‘Base Rate’ effective from September 6, 2010.”

Base rate is the lowest lending rate below which the bank cannot give loan to any customer.

It said, for 1 year floating fixed deposit the interest rate has been set to 50 basis points (bps) lower than the existing base rate which is currently at 7.5 per cent.

For 3 years (floating) term deposit the interest rate will be 25 bps lower than the base rate and for 5 years floating fixed deposit the interest rate will be at base rate.

However last month the RBI in its monetary review had raised the short term borrowing (reverse repo) rate by 50 basis points and lending (repo) rate by 25 bps to control inflation.