Merger of 5 associates to be completed in FY18: SBI chief

Mumbai: Top lender State Bank of India (SBI) on Thursday said the merger of its five associates will happen in the next financial year and ruled out any wage-related issues delaying the process.

Yesterday, the Cabinet gave its final approval to merger of SBI and its five associates - State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad.

The Cabinet, however, did not take a decision with regard to Bharatiya Mahila Bank, which, too, was supposed to be merged with the country's largest lender as per an earlier announcement.

SBI Chairman Arundhati Bhattacharya said the government will now issue a notification which will contain the date at which the merger will become effective.

"We think the merger would be some time in the next financial year because we are a listed company and doing such a large exercise just before the annual closing may not be a very good idea," she told news channels.

She ruled out any issues relating to wages of the employees of the associate banks delaying the amalgamation.

"At this point, there are no wage-related issues. The finance minister also asserted yesterday that the wages that people receive now will be protected," she added.

"The employees of the associate banks will be offered the wage package that our people have for the relevant grades. It's up to them to either accept that or retain the package they have now. They have a choice to do that."

Bhattacharya said that post-merger, SBI will enter the league of top 50 banks globally. "It would be difficult to give ranking at this particular time because it depends on both tier I capital and the asset size. Last year, our ranking was 52 or 53. It should probably go up."

Post-merger, the combined entity will have 23,899 branches and employee strength of 2,71,765.

On the balance sheet size, she said that as of December, consolidated deposits were a little over Rs 2,604,473 crore (Rs 26.04 trillion) and advances stood at Rs 18,76,727 crore (Rs 18.76 trillion). The consolidated balancesheet stood at Rs 32,18,498 crore (Rs 32.18 trillion).

There will be synergies in terms of treasury, offices, auditors and IT infrastructure. After the merger of five associate banks with SBI, the government shareholding in the combined entity will increase, she stated.

The merger was announced last May and the central board of the bank approved the proposal in August along with the share swap ratio.