New Delhi: State Bank of India on Friday fixed 17 March as the record date of share swap for the merger of its 5 associate banks with itself.
The merger process of the associates banks—State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH)—will take effect from 1 April.
The executive committee of the central board of SBI fixed 17 March as the record date for determining the eligible minority shareholder of SBBJ, SBM and SBT entitled to receive equity shares of face value of Re1 each, of SBI at the agreed swap ratio, the bank said in a regulatory filing on stock exchanges.
The board of SBI earlier approved the merger plan under which SBBJ shareholders will get 28 shares of SBI (Re1 each) for every 10 shares (Rs10 each) held. Similarly, SBM and SBT shareholders will get 22 shares of SBI for every 10 shares.
The shares of the listed associates will be delisted from stock exchanges following the merger. The entire undertaking of all five associate banks shall stand transferred to and vested in State Bank of India from 1 April, it said.
SBI had approved separate schemes of acquisition of SBP and SBH. There will not be any share swap or cash outgo as they are wholly-owned by SBI.
According to the scheme of merger, the pay and allowances offered to employees or officers of the five associates will not be less than what they would have otherwise drawn. SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged with it.
Once the merger takes effect, existing customers of the subsidiaries will benefit from the access to SBI’s global network. It will also lead to better management of high value credit exposure through focused monitoring and control over cash flows instead of separate monitoring by six different banks.
With the merger of all the five associates, SBI is expected to become a lender of global proportions with an asset base of Rs37 trillion (Rs37 lakh crore) or over $555 billion, 22,500 branches and 58,000 ATMs. It will have over 50 crore customers.