India backs state bank to merge units for efficiency

BloombergFriday, February 17, 2017
New Delhi • India’s Cabinet approved state-run State Bank of India’s (SBI) plan to absorb five of its units, a plan that could reduce cost of funds and boost operational efficiency, Finance Minister Arun Jaitley said on Wednesday. The units, including State Bank of Travancore and State Bank of Bikaner and Jaipur, will be merged into the nation’s biggest lender, Jaitley told reporters in New Delhi. State Bank of Hyderabad, State Bank of Mysore and State Bank of Patiala are the other subsidiaries that will be amalgamated into the parent, the Press Information Bureau said in a statement. SBI last year approved a plan to merge the units and Bharatiya Mahila Bank with itself, amid a government push to consolidate the nation’s fragmented banking industry. The plan to merge Bharatiya Mahila Bank with SBI is under consideration, Jaitley said on Wednesday. The merger is expected to result in cost savings, including 10 billion rupees (RM663.9 million) in the first year, arising from operational efficiency and lower cost of funds, according to the statement. — Bloomberg
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