Govt wants SBI to gain scale via merger of 4 subsidiaries

The government wants the State Bank of India to acquire its smaller associates to achieve scale and size. The government is working on a proposal, along with the SBI management, to merge four of its subsidiaries - the State Banks of Saurashtra, Mysore, Indore and Bikaner & Jaipur - with SBI to help increase its assets size by nearly Rs 1 lakh crore. However, leaving the bigger associates - such as the State Banks of Patiala, Travancore and Hyderabad - out of the merger will not serve the purpose of achieving size, insiders say. The seven associates put together have assets of over Rs 3.5 lakh crore. Associate banks such as the State Bank of Patiala, Travancore and Hyderabad, which have a strong legacy in their regions, will not be merged with the bank, sources in the government said. “It is possible that the smaller associate banks which do not have a strong regional presence will merge with the parent bank,” a source said.