Lok Sabha passes bill approving merger of associate banks with SBI
The government today said the merger of the five associate banks with the SBI will lead to increased capital base and availability of loan, as the Lok Sabha passed the bill approving the amalgamation.
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 of five associates with the parent SBI.
This merger, the SBI has come in the list of top 50 banks globally and is ranked at the 45th position.
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.
According to the statement of object and reasons of the State Banks (Repeal and Amendment) Bill 2017, after the acquisition of the subsidiary banks by SBI, the subsidiary banks have ceased to exist and, therefore, it is necessary to repeal the State Bank of India (Subsidiary Banks) Act, 1959 and the State Bank of Hyderabad Act, 1956.
Five associates and the Bharatiya Mahila Bank became part of State Bank of India (SBI) beginning April 1, catapulting the countrys largest lender to among the top 50 banks in the world. The five associates that were merged are 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)( These banks were subsidiaries of the SB).