Six banks are going to merge into SBI

India’s largest lender State Bank of India (SBI) has approved the merger of its operations with six associate banks, viz. State Bank of Travancore, State Bank of Mysore, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Patiala, and Mahila Bank.

It was in June that the centre had given the go-ahead to merge SBI with five of its associate lenders and Bharatiya Mahila Bank, thus increasing the chances of it breaking into the top 50 list of Bloomberg's largest bank by asset ranking.

Marking the first ever large-scale consolidation in the Indian banking industry, the merger will result in SBI becoming a huge banking entity with an asset book of Rs 37 lakh crore.

Also read: Clean up books before merger, SBI directs associate banks

As per the terms of the merger, SBI will give 28 of its shares for every 10 shares held of State Bank of Bikaner and Jaipur, while for every 10 shares held of State Bank of Mysore as well as State Bank of Travancore, it will give 22 of its shares.

For for every 100 crore equity shares of Bhartiya Mahila Bank, SBI will be giving 4,42,31,510 shares with face value of Re. 1.

Also read: Stalled projects from 2011 to 13 have put Indian banking sector into stress, says SBI Chairman

Comparing post-merger SBI with India’s second largest bank ICICI, its asset base will become five times as big as ICICI’s.

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