Govt to go ahead with merger of SBI subsidiaries, BMB: Arun Jaitley

New Delhi: Unfazed by the protests of bank unions, Finance Minister Arun Jaitley on Thursday said the government will go ahead with the merger of associates banks and Bharatiya Mahila Bank with SBI as the proposal has been approved at the highest level by the Union Cabinet.

"All procedure will be followed. The government has already taken decision at the level of the Cabinet to fully support the proposal for the merger," Jaitley told reporters post the meeting with public sector banks for the first quarter performance review.

Government has recently cleared the proposal to merge State Bank of India (SBI) with its five associate banks -- State Bank of Bikaner & Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Hyderabad -- and the new Bharatiya Mahila Bank (BMB).

In August, SBI had said that all its associate banks and BMB will be merged into it that will add an additional Rs 8 lakh crore to its assets making it a banking behemoth with total assets of Rs 30 lakh crore, an increase of about 36 percent.

In May, about 50,000 employees of the five SBI associate banks had gone on a day-long nationwide strike to protest the merger with their parent bank SBI.

The union, in a protest under the banner of All India Bank Employees Association, had said: "We are protesting against the plan of SBI management to merge 5 large associate banks into it.

Besides, the Kerala Legislative Assembly had passed a resolution in July against the merger of State Bank of Travancore (SBT) with SBI, stating it would adversely affect the state's economic growth.

The resolution, introduced by Chief Minister Pinarayi Vijayan, had asked the Centre and Reserve Bank of India to rescind the decision to amalgamate SBT with SBI.

In reply to a question on dilution of stake in IDBI Bank, Jaitley said the matter is still under consideration. "The issue is still under the consideration of the government. The decision of the government stands."

Government is also facing protest from bank unions with regard to divestment of its stake in IDBI Bank. It is planning to divest up to 49 per cent in a phased manner.

As of quarter ended June 30, government shareholding in IDBI Bank stood at 73.98 per cent.