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SBI to merge 5 associates, Bharatiya Mahila Bank with self

In what would create a Rs 37 lakh crore banking behemoth, state-run giant State Bank of India will merge its five associate banks, along with Bharatiya Mahila Bank, with itself.

In a press release, SBI said its board has given in-principle approval for the bank to discuss the possibility of acquiring its associate banks.

The five associate banks are State Bank of Travancore , State Bank of Hyderabad, State Bank of Mysore , State Bank of Bikaner and Jaipur  and State Bank of Patiala. The BMB was created in 2013 by the erstwhile UPA government, especially to cater to women’s lending needs but analysts say it has failed to take off.

“This discussion is purely exploratory at this stage and not certain,” the bank’s release said.

Government officials told CNBC-TV18 that no legislative changes will be required for this merger and that the process may get completed within this fiscal.

Commenting on the development, SBI Chairman Arundhati Bhattacharya said the the benefits of the merger would be huge.

She added that associate banks have a fixed assets worth Rs 4,000 crore and she saw lending costs reduce by 100 basis points within a year post this merger.

To be updated.