SBI puts its plan to merge six associates on hold

State Bank of India (SBI) seems to have taken a more cautious stance in progressing with the proposed merger of its six associate banks with itself. According to SBI chairman OP Bhatt, no further merger plan is on the cards for the time being. SBI has just completed the merger of State Bank of Saurashtra (SBS) with it and post-merger integration is still on. “Nothing is on the cards,” Mr Bhatt said recently on being asked about the merger of other associate banks with SBI. This is clearly a huge shift from what the SBI top management used to project on the issue of merger till very lately. The SBI management was earlier planning to initiate steps to merge State Bank of Patiala and State Bank of Hyderabad with the parent bank. Meanwhile, the Union government had started preparing the ground for merging State Bank of Indore and State Bank of Patiala with SBI. These plans have been put on hold. According to bank insiders, the focus is now trained on tiding over the ongoing financial crisis and economic downturn. So, issues like mergers would be taken up later when things settle down a bit. Based on a long-term plan, SBI would merge all its associate banks with itself to consolidate its presence. After the SBI-SBS blend, SBI has six associate banks — State Bank of Patiala, State Bank of Hyderabad, State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Indore and State Bank of Travancore. However, the SBI chairman is of the view that the employees of the banking group have now developed a positive attitude toward mergers. This despite the fact that SBI’s employees’ associations have been protesting against the merger. Interestingly, however, its associations had supported the SBI-SBS union. At present, the bank is busy integrating its bank operations after the SBI-SBS merger. Mr Bhatt said the post-merger rationalisation is on in areas like technology, asset management, branch banking and seniority. The chairman thinks this experience would help the country’s largest banking group in preparing for the proposed mergers when these transpire. Meanwhile, SBI has merged its Mauritius-based subsidiary, Indian Ocean International Bank (IOIB), with SBI International (Mauritius) to consolidate its operations in the African island nation. The new entity has begun operations as SBI (Mauritius).