State Bank of India's (SBI) new Chairman Pratip Chaudhuri today said it would continue with the policy of amalgamation of its associate banks for building scale.
"The path or this course of merging associate banks would continue," Chaudhuri said in the first press meet here after assuming charge yesterday.
"We did one merger every two years because we had to give more time for absorption of that network, of people in the parent bank but we are equally convinced about the need and correctness of doing that and we will pursue that," he said.
SBI did first ever amalgamation of its associate State Bank of Saurashtra in 2008 followed by State Bank of Indore in August last year.
"And now we have the experience of merging an associate which was 100% owned by SBI and another bank which was not 100% owned and there was some public ownership," he said, adding, "So, there is enough experience and enough learning".
"We think that the merger when completed does deliver value, synergies and does generate economies of scale without hurting individuals or depositors' interest," he said.
SBI has five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.
SBI plans consolidation of remaining 5 associate banks with itself in the next 12-18 months, the Finance Ministry had earlier informed a Parliamentary Committee.
Among these, the State Banks of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed companies.
Besides, Chaudhuri, Deputy Managing Directors Hemant G Contractor, A Krishna Kumar and Diwakar Gupta also assumed charge of Managing Directors yesterday.
Contractor would look after international banking operation of the bank while Kumar would take care of national banking. However, Gupta would be Chief Finance Officer.
Senior most Managing Director R Shridharan would continue to look after the existing portfolio.
With this, the country's largest lender SBI with 25% market share would have four 4 Managing Directors for the first time after amendment in the SBI Act.
Citing meeting with the Reserve Bank after taking over the charge Chaudhuri said: "They (RBI) mentioned that the consolidation whatever in the Indian banking space has happened has been only in the private sector that too in consolidating the weak banks particularly in the public sector except the associate banks there has not been significant consolidation."
