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Cabinet nod for merging SBI with 5 associate banks
The Union Cabinet on Wednesday approved the merger of State Bank of India and its five associate banks, Finance Minister Arun Jaitley announced.
 
"The cabinet approved the merger into SBI of its five subsidiaries, namely, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore, State Bank of Mysore and State Bank of Patiala," Jaitley told reporters following the cabinet meeting.
 
"The merger will lead to far greater operational efficiency and synergy of operations within these banks," he said.
 
"Obviously, with greater efficiency if cost of operations are reduced, the cost of funds will also come down," he added.
 
The Finance Minister said the merged entity will create a banking behemoth, "a very large bank, not only from the domestic point of view but also globally". 
 
SBI is the country's largest lender with about 16,500 branches, including 191 foreign offices spread across 36 countries.
 
"The merger is likely to result in recurring savings, estimated at more than Rs 1,000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds," a cabinet communique said. 
 
"Existing customers of subsidiary banks will benefit from access to SBI's global network. The merger will also lead to better management of high value credit exposures through focused monitoring and control over cash flows instead of separate monitoring by six different banks," it added. 
 
Jaitley said the proposed merger of Bhartiya Mahila Bank into SBI is still under consideration and the cabinet did not take a decision on the matter on Wednesday.
 
Last year, SBI had announced that it would merge its five subsidiaries and Bharatiya Mahila Bank on receipt of government approval for the same.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

marcelmdesouza

1 day ago

I think most of the major issues have been solved by associate banks with their mgmt and Unions.

Jyoti Dua

2 days ago

Any merger involves lot of dissatisfaction and pain for the employees of the smaller units merged into larger unit. However, mergers are beneficial for overall efficiency.

SatishKumar Janipalli

2 days ago

There is no need for this at this juncture where Banks have lots of money post demonitisation . I have an SBI account but opened a SBH account for better forex rate and they are swift too ...now I fail to understand... SBI with the clout in the forced marriage(none of the SBH employees are happy) - offer the same SBH forex rates to be competitive ....this may be to cover up NPAs of SBI .......with all the Banks merged ...the NPAs look miniscule for write off than SBI Stand alone write off .....it is my uneducated take...

Shirish Sadanand Shanbhag

3 days ago

Merger will add lot of chaos as other five State banks have their own held office, charman and employment terms and conditions.
All these banks were princely state banks. For example, State Bank of Hyderabad was Hyderabad State Bank, formed by Navab of Hyderabad State. Same way other four banks. Originally State Bank of India was Imperial State Bank, of British Government. After independence in the year 1955, it was rechristened as State Bank of India.
Merger will reduce the competition and will add lot of problems to other subsidiary banks' staff in their service conditions.

Bajaj Auto demands no extension of deadline for BS IV norms
Bajaj Auto on Wednesday said all its two- and three-wheelers manufactured from January 2017 are compliant with BS IV norms and demanded no amnesty be granted in meeting the deadline of April 1, 2017.
 
The Environment Pollution Control Authority (EPCA) directed neither the sale nor the registeration of any pre- BS IV vehicle from April 1, 2017.
 
"As a responsible corporate, we have complied with this directive and had already commenced manufacturing of BS IV complaint vehicles from October 2016. Moreover, with effect from January 2017, all products from all our three plants are BS IV compliant," said automaker's MD Rajiv Bajaj. 
 
"We have thus ensured that all vehicles presented for registration from April 1 onwards will be BS IV compliant," he said, adding that tightening emission norms to meet BS IV standard comes at a substantial cost.
 
The Central Pollution Control Board had earlier confirmed that BS III compliant vehicles could not be sold or registered anywhere in the country from April 1, 2017. However, some automobile companies have requested that this deadline be extended.
 
"All those who do not change on time will commercially benefit by selling their products at a lower price in case the amnesty is granted. Therefore, the manufacturers who have followed all directives in letter and spirit will actually end up being penalised," he said.
 
The automaker also said that the authorities should send strong message by "not giving any amnesty" and if at all any short-term amnesty is given, "it should be accompanied by a sizeable financial penalty on a per vehicle basis on all BS III vehicles registered after April 1, 2017" to discourage this practice in future.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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