The country's largest lender, State Bank of India, has announced that it will not go ahead with the merger of its associate banks due to some unfinished issues which have to be sorted out first, before going ahead with the consolidation.
On this matter, a senior SBI executive said, "Merger (of associate banks) is not immediate priority. It will not happen in the near future." He further added that the merger is unlikely this year and could take place next year.
SBI has five associate banks - State Bank of Mysore, State Bank of Travancore and State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad and State Bank of Patiala. Out of these, State Bank of Hyderabad and State Bank of Patiala are fully owned and are not listed at any of the stock exchanges. Rest of the three banks, are not fully owned and are listed at stock exchanges.
As amalgamation of unlisted entities is easier as compared to listed entities, it is speculated that State Bank of Patiala and State Bank of Hyderabad could be amalgamated first.
This will not be the first amalgamation for SBI. Earlier, in the year 2008 it amalgamated with State Bank of Saurashtra and then in August 2010 with State Bank of Indore. Prior to the amalgamations, both of these banks were also associate banks of SBI.