Lok Sabha nod to merger of banks with SBI

New Delhi: The Lok Sabha on Thursday approved the merger of five associate banks with the SBI with the government paving the way for the country’s largest lender to be among the top 50 banks in the world.

The Lok Sabha passed the bill to repeal the SBI (Subsidiary Banks) Act 1959, State Bank of Hyderabad Act 1956 and to further amend the State Bank of India Act, 1955, following the merger.

The five associates that were merged are the State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT).

Minister of state for finance Santosh Gangwar said in the Lok Sabha: “The merger will bring about increased capital base and increased ability to give loans. Also, small banks will get access to products like mutual funds.”

“We want every person to have access to banking services ...No bank branches will be closed down, rather wherever required, we will open branches.” Following the merger, the total customer base of SBI increased to 37 crore with a branch network of around 24,000 and nearly 59,000 ATMs across the country. The merged entity began operation with a deposit base of more than Rs 26 lakh crore and advances level of Rs 18.50 lakh crore. The minister added that in the last two years, 29 crore bank accounts were opened, of which 25 per cent were zero balance accounts, and that farm loans increased from Rs 3.5 lakh crore in 2009-10 to Rs 10.65 lakh crore in 2016-17.