With the Centre giving its in-principle approval to the mega merger proposal in the banking sector on Wednesday - the merger of six banks with SBI, State Bank of India chairperson Arundhati Bhattacharya hailed the move as a "win-win" for all.
Green signal was given at a cabinet meeting chaired by Prime Minister Narendra Modi.
The six banks are SBI's five associate banks - State Bank of Bikaner and Jaipur (SBJJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT) - as well as the Bharatiya Mahila Bank Limited (BMB).
In a statement issued by SBI, Bhattacharya 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."
The merger will create banking giant with assets worth around Rs.37 lakh crore.
On May 17, SBI had informed the bourses that it is seeking "in principle sanction" of the central government to enter into negotiation with the six banks to acquire their businesses including assets and liabilities.
Presently, the five associate banks operate as standalone banks with their own financials, board and management team, with oversight from SBI.
In addition, SBJJ, SBM and SBP are also listed with the presence of minority shareholders.