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16
February 2017
The
Union Cabinet on Wednesday approved the merger of State Bank of India and its
five associate banks, Finance Minister Arun Jaitley announced.
"The
cabinet approved the merger into SBI of its five subsidiaries, namely, State
Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore,
State Bank of Mysore and State Bank of Patiala," Jaitley told reporters
following the cabinet meeting.
"The
merger will lead to far greater operational efficiency and synergy of
operations within these banks," he said. The Total Investment & Insurance Solutions
"Obviously,
with greater efficiency if cost of operations are reduced, the cost of funds
will also come down," he added. The Total
Investment & Insurance Solutions
The
Finance Minister said the merged entity will create a banking behemoth, "a
very large bank, not only from the domestic point of view but also
globally".
SBI
is the country's largest lender with about 16,500 branches, including 191
foreign offices spread across 36 countries. The Total Investment & Insurance Solutions
"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," a cabinet communique said. The Total Investment & Insurance Solutions
"Existing
customers of subsidiary banks will benefit from access to SBI's global network.
The merger will also lead to better management of high value credit exposures
through focused monitoring and control over cash flows instead of separate
monitoring by six different banks," it added. The Total Investment & Insurance Solutions
Jaitley
said the proposed merger of Bhartiya Mahila Bank into SBI is still under
consideration and the cabinet did not take a decision on the matter on
Wednesday.
Last
year, SBI had announced that it would merge its five subsidiaries and Bharatiya
Mahila Bank on receipt of government approval for the same.The Total Investment & Insurance Solutions
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