Cabinet approves merger of 5 associate banks with SBI

The Union Cabinet on Wednesday approved the merger of 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 as well as Bharatiya Mahila Bank with State Bank of India, according to TV reports.

Last month, SBI cleared proposal for merger of subsidiary banks and Bharatiya Mahila Bank.

“Kindly await a structured briefing on that,” Telecom Minister Ravi Shankar Prasad said when asked if the Cabinet approved the merger of associate banks with the SBI.

Arundhati Bhattacharya, chairman, SBI said, “The merger of SBI and its associate banks is a win-win for both. While the network of SBI would stand to increase, its reach would multiply. One can expect efficiencies to be created from rationalisation of branches, common treasury pooling and proper deployment of a large skilled resource base. Currently, no Indian bank features in the top 50 banks of the world. With this merger, some visibility at global level is likely to increase. Customers of associates and subsidiaries of the bank will also be beneficiaries.”

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SBBJ profit tanks 31% in Q4 on higher bad loan provisions

State-run State Bank of Bikaner and Jaipu r (SBBJ) today reported a 31.05 percent plunge in net profit to Rs 193.22 crore for the quarter ended March 31, due to increased provisions for bad loans. 

The bank had posted a profit of Rs 280.25 crore in the same period last year. "In the fourth quarter, we doubled the provisions for loans compared with the corresponding quarter last year," the bank's managing director Jyoti Ghosh told reporters here. 

 The loan-loss provision stood at Rs 296 crore during the period compared with Rs 141 crore a year ago. The associate of the State Bank of India has an exposure of Rs 400 crore to the Punjab government food credit and as per the RBI instructions it has made a provision of 7.5 percent or Rs 31 crore during the quarter. 

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History of State Bank of Bikaner & Jaipur (SBBJ)

State Bank of Bikaner & Jaipur (SBBJ) was a major Indian bank. It was a subsidiary of State Bank of India, with which it was merged in 2017. As of 2015, SBBJ had 1,360 branches, mostly located in the state of Rajasthan, India. Its branch network out of Rajasthan covers all the major business centers of India. In 1997, the bank entered the capital market with an Initial Public Offering of 13,60,000 shares at a premium of Rs 440 per share. For the year 2015-16 the net profit of the company was 850.60 Crore.

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