Unaffected by the nationwide strike by employees of public sector banks, State Bank of India (SBI) Chairman Arundhati Bhattacharya said on Friday the merger of five associate banks and Bhartiya Mahila Bank with the country’s largest lender should be over by next March. On the sidelines of the launch of SBI’s wealth management offering called “SBI Exclusif,” Bhattacharya also said the Reserve Bank of India (RBI)will keep the policy rate unchanged in its policy review next month as inflation has gone up. At the same event, Finance Minister Arun Jaitley, who launched the initiative, said the convention that bank deposits were safe investment avenues would be a thing of past and people would shift to alternative instruments which have the potential to provide better returns.
“That is how the pension funds and sovereign funds are surviving and doing extremely well,” he said.
SBI, he said, can play a role in helping a large section of the retired population who are trying to live a respectable life on the strength of their savings. “In India now as that opportunity expands, as a number of people with additional resources increases, you need a set of competent managers to manage the resources,” Jaitley said.
Bhattacharya termed reports of her being in the reckoning for the RBI governor’s post as “media speculation”. SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged.
Services at around 80,000 bank branches in the country were hit on Friday as employees of public sector banks went on a one-day strike to protest against the proposed merger of SBI associates with the parent among other issues.
The merged entity will create a banking giant with an asset base of Rs 37 lakh crore.
SBI has 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. Of these, State Bank of Patiala and State Bank of Hyderabad are unlisted.
The SBI chairman said it was expected the central bank would keep interest rate unchanged as inflation has gone up. Retail inflation has gone up to around 5.8 per cent in June against RBI’s target of four per cent (+/- 2 per cent). RBI is scheduled to announce monetary policy review on August 9.