State Bank of Saurashtra’s merger with SBI approved

State Bank of Saurashtra’s merger with SBI approved
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First Published: Fri, Jul 25 2008. 09 23 AM IST
Updated: Fri, Jul 25 2008. 09 23 AM IST
New Delhi: The Indian government cleared the merger of State Bank of Saurashtra with State Bank of India, or SBI, moving ahead on a deal that had been stalled because of opposition from trade unions supported by Left parties.
The move came two days after the Congress party-led United Progressive Alliance won a trust vote in Parliament after parting ways with the Left parties.
The government will soon legislate to repeal the State Bank of Saurashtra Act of 1950, information and broadcasting minister Priya Ranjan Dasmunsi said, adding that the merger will help “State Bank of Saurashtra to face competition better”.
The government is also likely to legislate in the monsoon session of Parliament an amendment to the State Bank of India Act of 1955, that will recognize the change in nature of the bank’s ownership after the Union government transferred to itself in June last year stake held by the Reserve Bank of India, or RBI, Dasmunsi said after a cabinet meeting on Thursday.
Once the amendment comes into effect, it will allow RBI’s directors on SBI’s board to be replaced with government nominees—in line with criteria used for all other nationalized banks.
Separately, the cabinet also gave in-principle approval to fund interventions to develop the Kuttanad wetland ecosystem as part of a rehabilitation package for farmers in suicide-prone districts of Kerala.
The cabinet also approved policy guidelines to allot defence land to telecom operators to build shared communication towers and other infrastructure to extend their networks to military bases and cantonments.
In another decision, the cabinet approved a document that seeks mutual cooperation on criminal offences among countries of the South Asian Association for Regional Cooperation, or Saarc.
“The convention would provide a broad framework for Saarc member states to mutually cooperate and assist in the investigation and prosecution of crime and the tracing, restraint and forfeiture of the proceeds and instruments of crime,” Dasmunsi said.
The cabinet also authorized the external affairs ministry to negotiate and finalize the text of the convention and sign it during the Saarc summit in Colombo next month, he said.
The government also gave the go-ahead to a 444MW hydropower project at Vishnugad Pipalkoti to be developed by Tehri Hydro Development Corp. Ltd, or THDC, at an estimated cost of Rs2,492 crore.
The cabinet committee on economic affairs, or CCEA, which also met on Thursday, gave its approval to the project that is expected to be commissioned by June 2013, an official statement said.
THDC would contribute 50% of the equity through internal funds, while the remaining would be shared between the Union and Uttar Pradesh governments in the ratio of 3:1.
The cabinet also approved establishing an institute for stem cell and regenerative medicine in Bangalore, and the country’s first military tribunal to hear grievances of Armed Forces personnel.
The tribunal would be headed by a retired Supreme Court justice or a retired chief justice of a high court.
Sanjiv Shankaran contributed to the story.
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First Published: Fri, Jul 25 2008. 09 23 AM IST