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SBI not seeking blanket nod for merger plans

SBI not seeking blanket nod for merger plans
PTI
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First Published: Wed, Feb 23 2011. 02 54 PM IST
Updated: Wed, Feb 23 2011. 02 54 PM IST
Mumbai: Country’s largest lender, State Bank of India on Wednesday said it has not sought a blanket approval from the government for merging the remaining five subsidiaries with itself.
Bank chairman O.P. Bhatt said both the mergers which have been done till now—State Bank of Indore and State Bank of Saurashtra—have been done with prior permission on a case-to-case basis from all the concerned bodies like the respective boards, government and the RBI.
“We have not sought any blanket permission for the mergers,” Bhatt told reporters here when asked about a media report on which said SBI is mulling to merge all the remaining subsidiaries in the next 12-18-months.
He further said SBI did not meet the Parliamentary Standing Committee on Finance on Tuesday.
State Bank of Hyderabad, State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Travancore and State Bank of Mysore are the subsidiaries which are yet to be merged with the bank and it is argued that merging them will usher economies of scale and reduce administrative costs.
On SBI’s bond issue, he said the bank has received subscriptions of around Rs 6,000-crore for its Rs 2,000-crore retail tax saving bond issue (with the green-shoe option) and expects total subscriptions to touch Rs 10,000-crore by 28 February when the issue closes.
Bhatt added he “regrets” the fact that a majority of investors are unable to access the issue as the branches selling the issue need to have demat facility.
“We have decided to come out with one such issue every quarter. We will increase the branches from next quarter onwards,” he said.
Meanwhile, Bhatt, who also heads the industry body Indian Banks Association, came out in strong support for liberalising the entry of foreign banks into the country, saying this will make the market more competitive which in turn strengthens Indian banks and the processes they follow.
The Reserve Bank had invited suggestions on the issue recently and is expected to come out with some possible guidelines soon based on the representations it had received.
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First Published: Wed, Feb 23 2011. 02 54 PM IST