SBI get board approval for associate banks' merger

India's largest bank State Bank of India (SBI) on Thursday, said that its board of directors has approved the merger scheme with its five associates and Bhartiya Mahila Bank without any modifications. 

The bank in May this year had said that it will merge associate banks State Bank of Bikaner and Jaipur (SBBJ), State Bank of Travancore, State Bank of Patiala, State Bank of Hyderabad, State Bank of Mysore and the new Bharatiya Mahila Bank (BMB) with itself. 

During the announcement of Union Budget 2017, Finance Minister Arun Jaitley announced a consolidation move where small banks will be merge with large lender to tackle stressed assets. 

Earlier in August, SBI stated, this merger will add upto nearly Rs 8 lakh crore in its assets portfolio which will make its total assets upto Rs 30 lakh crore. 

The scheme of acquisition of SBI and its associates now will be submitted to the Reserve Bank of India for their approval. Once received clearance, RBI will forward the schemes to the Government of India for its approval and issue of order of acquisition under section 35 of the SBI Act, 1955. 

Shares of SBI closed at Rs 247.15, down by 2.5%. While associates closed negative - SBBJ at Rs 661 (2.5%), State Bank of Mysore at Rs 515 (3.6%) and State Bank of Travancore at Rs 518 below 2.77%.