Terming the government’s decision to go ahead with merger of State Bank of India (SBI) and its associate banks as a “right idea”, eminent economist Meghnad Desai has said other PSU banks should also be merged from the current 24 to 3-4 large banks.
“The consolidation of the State Bank of India is very much the right idea. The other PSU banks should also be merged from the present 24 (excluding SBI and its partners) into 3-4 large banks,” the India-origin British politician told PTI.
The Union Cabinet last month gave its go-ahead to the proposal of merger of SBI and its subsidiaries that could make the state-owned lender a bank of global size.
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.
Chairperson Arundhati Bhattacharya had also termed the proposed merger as a “win-win” for both sides.
Among the associate banks, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed.
The merged entity is expected to compete with the largest in the world, with an asset base of Rs 37 lakh crore, or over $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.
The state-owned lender first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was absorbed.