The largest lender in the country, State Bank of India is all set to grow to a mammoth size. The bank is under proceedings to merge the five subsidiary banks in it. The lender expects to complete the formalities involved in 12-18 months.
State Bank of India is expected to benefit a lot from the merger as it will reduce administrative overheads and the bank will be able to utilize the employees to the full extent.
In a statement Finance Ministry said “The consolidation is aimed at making the State Bank Group a stronger and more resilient organization.”
“While SBI has also stepped up its efforts to grow organically, the inorganic growth through mergers would also help the bank in scaling up within an acceptable time frame, to enable it to compete on an equal footing with foreign banks, not only in India but in the international economic arena as well,” informed the standing committee.
SBI has been working in this direction for 2 years now. Last year the bank merged State Bank of Saurashtra and State bank of Indore with it and now working on the five others.
The Finance Ministry also said “The merger of subsidiary banks with itself is thus more in the nature of restructuring leaving size, market share etc of the Group unchanged but leading to better operational efficiency.”
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