SBI may not complete merger this fiscal

The country’s largest lender State Bank of India is unlikely to merge five of its associate banks and Bharatiya Mahila Bank (BMB) with itself in the current fiscal, according to a top bank official. “We still have to get the government approval and even if we get it now, doing things like merger in the last quarter is never a very wise thing because there would be lot of IT system changes,” SBI chairman Arundhati Bhattacharya said.

“Sometimes IT system can impact something else quite unknowingly. So we do not want to take any risks at the annual closing time. We may look at completing the annual closing first and then look at the merger,” Arundhati added. SBI had approved the merger of five of its associate banks, namely State Bank of Travancore, State Bank of Mysore, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Patiala and Bharatiya Mahila Bank with itself in August.

Arundhati had stated earlier that the merger would be completed in the current fiscal itself. SBI, which announced a reduction in home loan rates to six-year lows, has also said that the bank could soon look at a revision in deposit rates.

“Banks have got a lot of funds due to demonetisation, and this will start flowing out. Once it starts happening, at that time, we will have a relook at the deposit rates,” Arundhati  said. Arundhati  also hoped that a roll back of the sharp cut in home loan rates announced on January 1 will not be required.

“We hope that there will not be a reversal in the lending rate. If required, we can reduce deposit rates to keep lending rates steady,” Arundhati said.