Mumbai: The State Bank of Indore on Friday proposed a merger with its parent State Bank of India (SBI).
“The board of directors of State Bank of Indore has passed a resolution recommending the merger or acquisition of State Bank of Indore with or by State Bank of India,” SBI informed the Bombay Stock Exchange (BSE).
The proposal for the acquisition of State Bank of Indore by the SBI will be subject to approval by RBI and the union government.
State Bank of Saurashtra (SBS), the smallest associate bank of SBI, was merged with the parent in August 2008.
The decision comes only a few weeks after finance minister Pranab Mukherjee asked public sector banks to consider consolidation as a serious option in order to reduce risks to financial stability and to face competition.
Currently, SBI has six associate banks: State Bank of Indore, State Bank of Travancore, State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Hyderabad. SBI chairman O.P. Bhatt had said last week that “Once we get the signal (from the government), the process will not take more than three to six months... we have taken initiative on our own for the merger.”