State Bank of India is all set to complete the merger with its 5 associate banks and Bharatiya Mahila Bank. As per the government orders issued, State Bank of India Act, 1955 the undertaking of State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad will transfer to State Bank of India. The merger will be done in phases and therefore, is expected to be completed in three months. After the amalgamation of these banks on April 1st, there will be a change in the bank policies.
The bank has decided to shut down the offices of these banks, including the head offices of three of them. SBI Managing Director Dinesh Kumar Khara told in an interview that out of the five head offices of the associate banks, only two will be retained. The other three offices will be unbound along with 27 zonal offices, 81 regional offices and 11 network offices of the associate banks.
Also, to prevent duplication, SBI MD Rajnish Kumar said that 1,500 branches shall be closed.
There are many duplications and they need to be rationalised. About 1,500-1,600 branches have to be rationalised. The closure could be of SBI or associate bank depending on location
This move is taken to avoid the overlapping offices and branches in the same area. The shutdown will impact directly on the job of employees. However, it will benefit the bank as a whole.
The SBI merger with associate banks will affect the banking functions as well. The major change will be in online transactions. The online portal of associate banks will cease to function from the date of the merger. All the products of these banks won’t be offered and will be replaced by SBI product basket. However, the interest on deposits will be paid at the same rates until the expiration of contract period.
This merger sets the scope for SBI to rank among top 50 banks in the world. The Chief Economist of SBI, Soumya Kanti Ghosh told IANS that post-merger the bank will be at No.45. Currently, with assets of ₹30.72 lakh crore the bank figures at No.64 in the global ranking of banks.
SBI Reduces Base Rate By 15 Basis Points
State Bank of India has also reduced its base rate by 15 basis points. The base rate has been reduced from 9.25% to 9.10%. This particular news is bound to bring cheers to all the customers who have taken a loan from the bank before April 1, 2016. SBI has not made changes to its marginal cost-based lending rate (MCLR).