The board of the State Bank of India (SBI), in its meeting held on Friday, has approved the proposal for the acquisition of the State Bank of Indore. The proposal is subject to an approval of the government and the Reserve Bank of India (RBI).
The State Bank of Indore has too passed a resolution that would allow its merger with SBI. SBI currently holds a 98.05% stake in State Bank of Indore. State Bank of Indore is the smallest of SBI’s six associates.
In august last year, SBI had merged State Bank of Saurashtra with itself. The bank had then appointed former deputy managing director Bharati Rao as the advisor for the merger.
SBI’s other associate banks are State Bank of Hyderabad, State Bank of Mysore, State Bank of Bikner and Jaipur, State Bank of Travancore and State Bank of Patiala. The bank holds 100% stakes in State Bank of Hyderabad and State Bank of Patiala. It is expected to merge State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore with itself later.
The merger of all the associates of SBI with it can take the total assets of the combined entity to Rs 8,00,000 crore. This could make the bank a global financial leader.
However, The Hindu Business Line reports that the merger may face strong opposition from the employees of State Bank of Indore as they have decided to go on a protest strike on June 22. The bank has more than 7,000 employees. Also, a strike for all the SBI associate banks across the country has been scheduled for July 3.