Banking on consolidation

SBI merger is a good start but the real challenge lies ahead

The merger of State Bank of India (SBI) with five of its associates will create an entity that will be one of the 50 largest banks in the world with an asset base of Rs 37 lakh crore and a presence in 36 countries. It will have over 500 million customers and an employee strength of over 270,000. The merged entity will be almost five times the size of India’s second largest bank. The combined balance sheet will bear the brunt of a poor bad loans ratio with gross non-performing assets (NPAs) at 8.7 per cent of combined advances and