SBI and associates grab spotlight

State Bank of India and its associate banks are in the limelight today morning. SBI announced yesterday after market hours that it is going in for an in principle sanction from the Govt to merge its 6 subsidiary banks into itself - State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore, and Bharatiya Mahila Bank.

Playing it safe, SBI in its Press Release stated, “no decision has been taken at this stage approving one or more of the aforesaid acquisitions and the same will be taken by the bank's board upon evaluating all the relevant considerations, including pursuant to discussions with relevant stakeholders, upon and subject to receipt of sanction from Govt.”

This move has been mooted many a times in the past but was always nixed due to opposition from the unions. After this news, the All India Bank Employees’ Association has called a strike on May 20.

This is the logical thing to do – as all the banks are merely duplicating what SBI is already doing. Merging them together will create greater synergies and create a mammoth bank with assets worth Rs.37 lakh crore or $550 billion from the current Rs.28 lakh crore.

State Bank of Bikaner and Jaipur rose over 4.5% but it now in the red, State Bank of Mysore is up over 8%, State Bank of Travancore is up 4% and SBI itself is up less than 1%. State Bank of Hyderabad, State Bank of Patiala and Bharatiya Mahila Bank are not listed.