Cabinet approves merger of SBI, 5 associate banks

Cabinet approves merger of SBI, 5 associate banks

The Union Cabinet on Wednesday gave the final approval for the acquisition by the State Bank of India of its subsidiary banks, namely State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore.

The Cabinet also approved the introduction of a Bill in Parliament to repeal the State Bank of India (Subsidiary Banks) Act, 1959 and the State Bank of Hyderabad Act, 1956.

The exact date for the merger would be notified later. No decision was, however, taken on the question of merger of the Mahila Bank with the SBI on Wednesday. “The matter is under consideration but no decision was taken,” Finance Minister Arun Jailtey told reporters after the Cabinet’s meeting.

The merger is likely to result in recurring savings, estimated at more than Rs 1,000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds. Jaitley said the SBI would emerge as one of the biggest banks in the world after the merger.

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