State Bank of Saurashtra to be merged with SBI

SBI has decided to merge State Bank of Saurashtra, a wholly owned associate bank, with itself. The boards of both SBI and State Bank of Saurashtra have given an in-principle approval to the merger proposal, a senior SBI official confirmed on Saturday. SBI will now have to get approvals from both the Government, the majority owner of the bank holding 59.73 per cent stake, and the Reserve Bank of India. State Bank of Saurashtra is the smallest among the seven associate banks of SBI, in terms of networth. SBI’s controlling interests in the associate banks range from 75 per cent to 100 per cent. State Bank of Saurashtra (SBS) has a branch network of 460 and SBI officials said once the merger is approved, consolidation of the branch network for eliminating duplication of branches in the same geographical area would start in six months. SBS reported a net profit of Rs 87.4 crore in 2006-07, a jump of 45.4 per cent from Rs 60.1 crore in the previous year. The bank has paid-up equity capital of Rs 314 crore. SBS’ total deposits stood at Rs 15,804 crore while total advances were at Rs 11,081 crore. A senior SBI official said State Bank of Indore could be the next bank on the radar in the consolidation process as it is the smallest bank after State Bank of Saurashtra