Consolidation fiasco

SBI shows how mergers can be a wrong solution

In May this year, while announcing the bank’s dismal quarterly results for the fourth quarter of 2016-17, State Bank of India (SBI) Chairperson Arundhati Bhattacharya had talked about a “little more pain” that lay ahead in the near term. The fourth quarter results were the first quarterly performance of the merged entity comprising SBI, five associate banks and Bharatiya Mahila Bank (BMB) — a part of the government’s consolidation drive. While it catapulted the country’s largest lender to among the top 50 banks in the world, it also weakened the original standalone entity considerably in terms of non-performing assets (NPAs).