The largest lender of the country, State Bank of India is now planning to merger its associate lender, State Bank of Mysore to itself. According to a top official of the bank, the process of merger should be a smooth one as the two lenders already share various commonalities in terms of similar business philosophy, technology platform and many more.
"Our technology platform, business philosophy and work cultures have a lot of similarities. So, the proposed merger of SBM with SBI should be smooth in creating value for all stakeholders," R Sridharan, managing director and group executive (associates and subsidiaries) said.
So far SBI has merged State Bank of Indore and State Bank of Saurashtra to itself. It is now left with five associate banks namely State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.
"After the merger of two associate banks with SBI, we have enough experience to deal with merger of both listed and unlisted associates. I hope, this will come handy in case of other mergers also," Sridharan said.
"The majority of government business is done by the State Bank of Mysore, State Bank of Hyderabad and State Bank of India. As these banks have high levels of synergy in operation, government business will not be affected by the proposed merger," he said.
"Given the higher share holding of SBI in State Bank of Mysore, the merger will give economies of scale to the parent," an industry expert said.