In a bid to create global size bank, the board of State Bank of India today approved scheme of merger of five associate lenders and Bharatiya Mahila Bank (BMB) with itself while protecting the interest of the existing staff.
"The central board of directors of SBI has accorded its approval to the scheme of acquisition of the State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT) and Bharatiya Mahila Bank Limited (BMBL) by the State Bank of India," SBI said in a regulatory filing to stock exchanges.
Later, in an update, it also approved separate schemes of acquisition of State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH) with SBI.
As per the merger proposal, SBBJ shareholders will get 28 shares of SBI (Rs 1 each) for every 10 shares (Rs 10 each). Similarly, SBM and SBT shareholders will get 22 shares of SBI for every 10 shares.
There will not be any share swap or cash outgo as SBH and SBP are wholly-owned by the SBI.
In the case of Bharatiya Mahila Bank, 4,42,31,510 shares of SBI will be swapped for every 100 crore shares of face value of Rs 10 each.
As per the merger proposal, the pay and allowances of the staff of the merging bank will be protected and "shall not be less favourable overall as compared to what they would have drawn".
Also, benefits of the retired employees will be protected, it said.
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The proposal also said whole-time directors, including managing directors, will cease to hold office once the board of directors stands dissolved.
After the merger, all assets and liabilities will be transfered to the acquiring bank.
Individual banks have appointed merchant bankers and chartered accountants.
With the merger of all the five associates and BMB, SBI will become a global-sized bank and could compete with the largest in the world, with an asset base of Rs 37 trillion (Rs 37 lakh crore) or over USD 555 billion, with 22,500 branches and 58,000 ATMs. It will have over 50 crore customers.
SBI has close to 16,500 branches, including 191 foreign offices spread across 36 countries.
It first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged.
On Thursday, the SBI stock closed at Rs 248.20, up 0.79 per cent, on BSE. SBBJ shares ended the day at Rs 673.30 a piece, up 3.49 per cent while those of SBM were up 2.06 per cent at Rs 621.70.
Meanwhile, a section of public sector bank employees will go on strike on September 2 along with central trade unions.
All India Bank Employees' Association (AIBEA) will join the all India general strike to protest against the central government's "anti-people economic policies and anti-worker labour reforms".
"Banking industry is no exception. In the banking, we are already aware of the government's continuous attempts to push through their reforms agenda aimed at privatisation of banks, consolidation," AIBEA said in a statement.
