State Bank of India (SBI) on Thursday approved the merger of associate banks and the Bharatiya Mahila Bank, with itself, marking one of the biggest consolidations in the banking sector seen in recent years.
SBI, which is India's largest lender by assets, informed the Bombay Stock Exchange (BSE) that a decision to the effect was taken by the board of directors during a meeting (on Thursday) after trading hours.
The banks being merged are listed associate banks — State Bank of Mysore (SBM), State Bank of Travancore (SBT) and State Bank of Bikaner and Jaipur (SBBJ), besides two unlisted banks, State Bank of Patiala and State Bank of Hyderabad, in which SBI holds 100 percent equity.
The swap ratio was also finalized by the SBI board, as informed to the stock exchanges:
28 equity shares of Re. 1 each of SBI for every 10 equity shares of Rs. 19 each of SBBJ;
22 equity shares of Re. 1 each of SBI for every 10 equity shares of Rs. 10 each of SBM;
22 equity shares of Re. 1 each of SBI for every 10 equity shares of Rs. 10 each of SBT and
4,42,31,510 equity shares of Re. 1 each of SBI for 100 crore equity shares of Rs. 10 each of Bharatiya Mahila Bank.
SBI shares closed at Rs. 242.80 apiece on the BSE, up 0.79 percent from their previous close. SBM ended at Rs. 621.70, up 2.06 percent, SBT at Rs. 508.85, up 0.28 percent and SBBJ gained 3.49 percent to close at Rs. 673.30, on the BSE.
Bharatiya Mahila Bank (BMB) commenced operations in November 2013; it was established during the Congress-led UPA regime for the economic empowerment for women. The bank had 100 branches as of May this year.
