According to the latest report, State Bank of India will not be requiring any of the fair trade regulator CCI’s while approving for the merging of its 5 associates and Bhartiya Mahila Bank with itself. It is a move which will create a global sized bank which is having an asset base of Rs. 30 lakh crore. Acquisition is a kind of attempt from the approval of the competition commission of India under the Competition Act 2002.
Source: Sakshi TV
First Step over the large scale consolidation
- According to the Competition Act amendment, consolidation over the banking sector space is one of the attempts from the approval of CCI. During the last week, board of SBI has approved a scheme of merger of five of its associates lenders State Bank of Bikaner and Jaipur(SBBJ), State Bank of Travancore (SBT) and Bhartiya Mahila Bank (BMB) with itself while protecting the interests of the existing staff.
- Consolidated entry will further be adding up to about Rs. 8 lakh crore (about $120 billion) over the assets of SBI. Even the consolidated entry will be catapulted over the top 50 banks globally. Bank has taken a big step over the first ever large scale consolidation over the Indian Banking Sector which is having a network of more than 24,000 branches, 2,70,000 employees and having a total asset of Rs. 30 lakh crore, increase of 36 percent.
Merging of the shareholders
- Second largest lender being the ICICI bank is further posting the merger which will be almost one-fourth of the SBI over the means of total deposits and advances. Mergers will also be catapulting the bank in its top 20 banks globally. It is moving further the bank’s mission statement for being in service over the remotest parts.
- As per the proposal of the merger, SBBJ will be having shareholders which will be getting 28 shares of SBI (Rs. 1 each) for every 10 shares (Rs. 10 each). Similarly, SBM and SBT shareholders will be getting 22 shares of SBI for every 10 shares. While considering the case of Bharatiya Mahila Bank, 4,42,31,510 shares of the SBI will be swapped for about every 100 crore shares over a face value of Rs. 10 each.
- SBI is the first merged State Bank of Saurashtra with itself during 2008. After duration of 2 years, State Bank of Indore was also being merged.