New Delhi: State Bank of India will not need fair trade regulator CCI’s approval for merging 5 associates and Bhartiya Mahila Bank with itself, a move that will create a global sized bank with an asset base of Rs 30 lakh crore.
The acquisition is exempt from the approval of Competition Commission of India under the Competition Act 2002, sources said.
As per the amendment to the Competition Act, consolidation in the banking sector space is exempt from the approval of CCI, sources added.
Last week, the board of SBI approved scheme of merger of five associate lenders State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT) and Bharatiya Mahila Bank (BMB) with itself while protecting the interest of the existing staff.
The consolidated entity will add Rs 8 lakh crore (about USD 120 billion) to SBI’s assets and consolidated entity will get catapulted into the top 50 banks globally.
The bank has taken a big step towards the first-ever large scale consolidation in the Indian banking sector by deciding to merge all its associate and BMB to create a banking behemoth with a network of more than 24,000 branches, 2,70,000 employees and total assets of Rs 30 lakh crore, an increase of 36 per cent.
Second-largest lender ICICI Bank post this merger will be almost one-fourth of SBI, in terms of total deposits and advances, it said, adding the mergers will catapult the bank into top 50 banks globally and is in furtherance of the bank’s mission statement to be of service in the remotest parts.
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 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.
SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged. PTI
For more news updates Follow and Like us on Facebook