Zee Media Bureau
New Delhi: In an effort to woo small shareholders of the six associate banks opposing merger, State Bank of India on Thursday announced a share swap scheme that gives investors more value for their holdings.
The banking trade unions and shareholders are opposing merger of with SBI fearing closure of branches, resulting in staff redundancies, curtailment of banking services and loss of employment opportunities.
As per the proposal, investors in State Bank of Bikaner and Jaipur holding 10 shares will get 28 shares of SBI. The board of SBI has also given its nod to the proposal.
It is proposed that investors in State Bank of Mysore and State Bank of Travancore holding 10 shares will get 22 SBI shares each.
SBI will also issue 44.2 million shares for 1,000 million shares of Bharatiya Mahila Bank.
This scheme would essentially mean a net gain of about 3.2 per cent for shareholders of SBBJ and 7.9 per cent for those of State Bank of Travancore, based on Thursday’s share closing price. Investors of State Bank of Mysore, however, stand to lose about 12.2 per cent.
The merger plan was approved by the boards of all banks in May. This merger would create a ₹37-lakh crore entity, which is more than five times the size of India’s second-largest lender, ICICI Bank.
Since State Bank of Hyderabad and State Bank of Patiala are already wholly-owned subsidiaries of SBI, no share-swap would be required.