MoF finishes work on SBS & SBI merger

NEW DELHI: The government is expected to formally announce the merger of State Bank of Saurashtra (SBS) with the State Bank of India (SBI) this week. The merger had received the approval of the Union Cabinet earlier this month. SBS is a fully-owned subsidiary of SBI.

After getting Cabinet approval, the finance ministry has finished the groundwork for repealing the State Bank of Saurashtra Act, 1950 and amending the SBI Subsidiary Act, 1959 to effect the merger.

The government would have to present a new bill called the SBI Subsidiary Bank Amendment Bill, 2008 in the Parliament during the monsoon session for final approval on the merger. All the references to the SBS Act would be deleted from the SBI Subsidiary Act, 1959 through the proposed Bill.

The merger would pave the way for the amalgamation of other six associate banks of SBI with itself and help the country���s largest lender take on the competition, particularly from private and foreign lenders, in a better manner. The merger will enable SBI to scale up its business in terms of footprint, manpower and resources. Boards of SBI and SBS had given their approval for the merger in August last year.