State Bank of India's (SBI) proposal to merge five of its subsidaries and Bharatiya Mahila Bank (BMB) may be deferred until the next financial year (2017-18) as the bank is awaiting the government's notification.
SBI chairman Arundhati Bhattacharya feels engaging in things like merger in the last quarter would not be a wise thing to do since there will be a number of IT system changes by the middle of February.
Also read: State Bank of India says merger will add $120 billion to assets
"Sometimes IT system can impact something else quite unknowingly. So we don't want to take any risk at the annual closing time and may want to do the annual closing and then look at it," Bhattacharya was quoted as saying by the Press Trust of India.
When asked whether she had a new time frame for completing he merger, Bhattacharya said all depends on the government's notifying the merger, the PTI added.
SBI, India's largest public-sector bank, had announced its merger plan in May last year and three months later, the bank's central board of directors had approved it. During that time, it was announced that the process would be completed by March 2017.
"The (merger) process will start by October-end. The grievance committee will come to us hopefully by September end, after that we have to send it to the Reserve Bank and then to the government, which may probably take a little time of about a month; and then it will come to us. After that, we will have to make an offer to employees and then give them four weeks time and then the merger can take place," Bhattacharya was quoted as saying in October.
According to media reports, SBI would become one among the top 50 lenders in the world with the merger. It would have an asset base of Rs 37 trillion (over $555 billion). Post merger, it will have 22,500 branches and over 58,000 ATMs with a customer base of 50 crore.
The five subsidiary banks of SBI (to be merged) are: State Bank of Mysore (SBM), State Bank of Bikaner and Jaipur (SBBJ), State Bank of Patiala (SBP), State Bank of Travancore (SBT) and State Bank of Hyderabad (SBH).
The SBI stock was trading at Rs 245.60 around 10:12 am on Tuesday (January 3), up 0.82 per cent from its previous close on the Bombay Stock Exchange.
