SBI asks Govt to okay acquisition of associate banks, Mahila Bank
Top state-run lender SBI on Tuesday proposed merger of its five associate banks and newly created Bharatiya Mahila Bank (BMB) with itself and sought government’s approval for the same, triggering consolidation in the public sector banking space.
SBI is seeking “in principle sanction” of the Central Government to enter into negotiation with the subsidiary banks (State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore) and Bharatiya Mahila Bank Limited to acquire their businesses, including assets and liabilities, a statement said.
“While the decision is purely exploratory at this stage and there is no certainty in relation to our completing the acquisitions, the Bank, as a matter of good corporate governance to ensure complete transparency, are intimating this decision,” it said. No decision has been taken at this stage approving one or more of the aforesaid acquisitions and the same will be taken by the bank’s board upon evaluating all the relevant considerations, it added.
Earlier in the day, respective boards of five associate banks proposed merger with the parent State Bank of India (SBI) in meetings held on Tuesday. The country’s largest lender has five associate banks — State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.
SBI arm banks’ scrips surge
Shares of three associate banks of SBI on Tuesday surged up to 13 per cent on reports that the lenders have proposed merger with the parent bank. The scrip of State Bank of Mysore soared 12.76 per cent to Rs 426.70, and that of State Bank of Travancore rallied 9.87 per cent to Rs 399.10 on BSE. State Bank of Bikaner and Jaipur too rose by 4.22 per cent to Rs 508.95.