The largest lender of the country, State Bank of India will start the merger process with its associate bank State Bank of Indore from August 26.
Following the merger, the entire undertaking of State Bank of Indore will be transferred to SBI beginning from 26th August.
An order titled 'Acquisition of State Bank of Indore order 2010' has been released by the government on 28th July 2010.
The merger had received approval from the board of SBI last year. The banks party to the merger finally received approval from the cabinet.
SBI has announced a share swap ratio of 34:100 for the merger. This means that minority shareholders would be receiving 34 shares of SBI for every 100 shares of State Bank of Indore.
After the merger, SBI will be left with five associate banks, State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. Among these, the State Banks of Bikaner and Jaipur, Mysore and Travancore are listed companies.