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Wednesday, November 13, 2013

SBI not to merge any associate bank this fiscal

State Bank of India has gone back on its plan to bring one of its associate bank’s under its fold in the current fiscal.

“For the time being, the associate bank merger is on the backburner. Nothing is going to happen till March 31, 2014,” said S. Vishvanathan, Managing Director, Associates and Subsidiaries.

In August, the then chairman of the bank, Pratip Chaudhuri, had said that SBI will merge one of its associate bank with itself by end of September.

He had further added that it could be a bank with a weak retail base leading to widespread speculation that the bank to be absorbed could be State Bank of Patiala.

SBI has five associate banks — State Bank of Hyderabad, State Bank of Mysore, State Bank of Travancore, State Bank of Bikaner and Jaipur and State Bank of Patiala.

Arundhati Bhattacharya, the incumbent SBI chief, said, “We need to do a little more consolidation on our side before we take that (another bank) on. It is not off the table, but at this point we need to pay attention to what we are doing in a better manner.”

A top executive at the SBI said that there is a new chief at the helm and priorities change when a new person assumes charge.

Another reason why the associate bank merger has been delayed could be because the country’s largest lender is grappling with higher staff expenses. Staff expenses at SBI rose 36 per cent in the latest reporting quarter to Rs 5,819 crore. The bank will also have to pay higher salaries for employees of the merged bank. SBI is the highest paymaster among public sector banks.

Source: thehindubusinessline


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