Top state-run lender SBI has proposed merger of its five associate banks and newly created Bharatiya Mahila Bank (BMB) with itself and sought government’s approval for the same — a major bid to consolidate the public sector banking space.

SBI is seeking “in principle sanction” of the Central Government to enter into negotiation with the subsidiary banks (State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore) and Bharatiya Mahila Bank Limited to acquire their businesses, including assets and liabilities.

No decision has been taken at this stage approving one or more of the aforesaid acquisitions and the same will be taken by the bank’s board upon evaluating all the relevant considerations.

Commenting on the proposal, SBI Chairperson Arundhati Bhattachraya said with the merger the balancesheet size will soar to Rs 37 lakh crore from Rs 28 lakh crore currently. Meanwhile, a section of employee unions have registered protest against any such move and threatened to go on a strike if such a move is approved by the SBI and the government.

Did You Know?

• SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged.
• The government recently set up the Bank Board Bureau (BBB) to look into the issues including consolidation in public sector banking space.
• The BBB headed by former CAG Vinod Rai has conducted interview for appointments of Managing Directors of some of the banks where posts will be falling vacant during the current fiscal.