SBI pushes merger of 5 associate banks, BMB to next fiscal

SBI pushes merger of 5 associate banks, BMB to next fiscal MUMBAI: The merger of the five associate banks with State Bank of India (SBI) will be postponed to by a quarter due to the demonetisation exercise, acknowledged SBI chief Arundhati Bhattacharya who for weeks had said that the merger is as per the schedule. The bank had announced in May plans to merge its five associate

banks with itself by March 2017 to emerge as a global bank in order to compete with peers in emerging markets. Speaking to media on Monday on whether the merger of associate bank is as per the schedule, Bhattacharya said that the merger will “probably be delayed by a quarter”. She said that the delay has been because the government has not notified the merger. “The reason is we still have to get government approval. Even if I get the approval right now doing things in the last quarter is not a wise thing. There will be a lot of IT system changes and normally by mid-February we close down all IT system changes as these can impact something else quit unknowingly. We do not want to take any risks at the annual closing time. So we may just want to do the annual closing then look at it,” she said.

On November 24, SBI chief Bhattacharya had said in Coimbatore that merger of associate banks remains on track and would not be unaffected by the demonetisation move. “There is a separate team working on this and they are not into demonetisation exercise,” she said according to media reports. Subsequently, on December 5, PTI reported that Rajnish Kumar, managing director of SBI had reiterated that merger will not be affected due to demonetisation.

The focus of banks had shifted to serving customers at front office following the move to scrap the high value Rs 500 and Rs 1000 notes on November 8. Due to restriction in cash withdrawals and several cash crunch, the bank had deployed many banks staff from corporate office to branches to manage customers who had queued up to withdraw cash. During these 50 days the bank open 89 lakh new accounts in order to provide banking services to underprivileged class of the society.

In May, SBI cleared proposal to merger with itself five associate banks State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Mysore, State Bank of Patiala, State Bank of Hyderabad and one PSU bank - Bharatiya Mahila Bank.