| SBI to absorb associate banks by Mar '09 |
| BS Reporter / Mumbai December 25, 2007 |
| State Bank of India plans to merge all the associate banks with itself by March 2009. This step is to position SBI group to be face intensely competitive banking environment in India which is likely to see more greater room for international players post April 2009. The proposal for merger of State Bank of Saurashtra with SBI will go before union cabinet, which is expected to give its nod soon. Once, cabinet approval (for SBH merger) is with us, it will set the dynamics for merger of other associate banks, SBI chairman O P Bhatt said. Both award and supervisory cadre association at SBS have favoured merger with SBI. The issue consolidation of associate banks was taken up only by SBI board and SBH board. The boards of other banks have not been sounded about consolidation, Bhatt said. The respective boards are likely to meet in January 2008 to dwell on merger proposal. Once SBI-SBH merger through, the consolidation of other entities should not take long time as concept is ready and most of the ground work is place and only task that will remain is of execution and implementation. "It has to happen before March 2009", the chairman said. They have posted a year-on-year growth of 16.85% in net profit at the end of September 2007. While the aggregate deposits grew by 20.71%, the advances rose by 26.84%. The Associate Banks command a market share of 7.33% in deposits and 7.68% in advances. The capital adequacy of associate banks taken together stood at 12.44%. Their gross non performing assets were 1.91% (2.34% in Sept 2006). Dwelling on the credit growth of SBI in the third quarter, he said "it will grow at 25-26% (year-on year), than 30% seen in Q3 last financial year. The growth has picked up in November and December. The agriculture and SME segments have shown robust credit demand. The deposit growth is between 20-22%. India |
