Mumbai, Nov 08: The Reserve Bank of India has asked the government to introduce legislative amendments that will allow the State Bank of India (SBI) to acquire other banks and raise capital from the market. In a communication to the government, the Reserve Bank of India has proposed amendments to the State Bank of India Act ’55 to facilitate enhancement of authorised capital, bring voting rights of the shareholders in conformity with the provisions of the Banking Regulation Act, rationalise powers of the local board, facilitate acquisition of the business of other banks and to provide for procedural matters relating to shares on the lines of Companies Act.


Similar amendments have also been proposed in the State Bank of India (Subsidiary Banks) Act, ’59 to enhance the authorised capital and reduce SBI stake in its subsidiaries to 51%.

Earlier, the central bank had suggested the transfer of its holding in SBI to the government. However, the government has till now failed to move on this. Sections of the industry feel that SBI may also have to take a view on the long standing proposal for a merger of SBI associates with the parent. Although several chairmen have tried to push for consolidation of the associate banks with the parent, they have made little headway.
Bureau Report