Lok Sabha Question No. 2737 (UNSTARRED), answered on 2017-03-17
Subject: Merger of Banks
Ministry: FINANCE
Asked by: SAUGATA ROY, P. C. MOHAN, P.K.SREEMATHI TEACHER, George Baker, (ADV.) JOICE GEORGE, RAMACHANDRAN MULLAPPALLY, ASADUDDIN OWAISI, Richard Hay, M. B. RAJESH, MUTHAMSETTI SRINIVASA RAO (AVNTHI), YERRAM VENKATA SUBBAREDDY, RAM CHARITRA

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO.2737

TO BE ANSWERED ON THE 17 th  March 2017/ Phalguna 26, 1938 (SAKA)

## Merger of Banks

QUESTION

2737.  PROF. SAUGATA ROY:

SHRI P.C. MOHAN:

SHRIMATI P.K. SREEMATHI TEACHER:

SHRI GEORGE BAKER:

ADV. JOICE GEORGE:

SHRI MULLAPPALLY RAMACHANDRAN:

SHRI ASADUDDIN OWAISI:

PROF. RICHARD HAY:

SHRI M.B. RAJESH:

SHRI MUTHAMSETTI SRINIVASA RAO (AVANTHI):

SHRI Y.V. SUBBA REDDY:

SHRI RAM CHARITRA NISHAD:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has approved the merger of State Bank of India (SBI) with its five subsidiaries, if so, the details thereof and the reasons therefor along with its present status;
- (b) whether  detailed  plan  has  been  chalked  out  by  SBI  for  staff  of  the  subsidiaries  and  its  branches  to  be accommodated with SBI along with the benefits likely to be derived by employee and subsidiaries after this move and if so, the details thereof;
- (c) whether such merger is in the pipeline in regard to other banks and if so, the details thereof along with the steps taken/being taken by the Government to ensure that employees interest of subsidiaries banks are kept in view and not harassed as was done during the merger of Pubjab National Bank and New Bank of India;
- (d) whether such merger can fix the problem of bad loans and provision of job security, welfare schemes of the existing employees and pension liability of subsidiary banks and if so, the details thereof; and
- (e) the manner in which such merger is likely to be benefited for the existing customers of the five subsidiaries?

## ANSWER

The Minister of State in the Ministry of Finance (SHRI SANTOSH KUMAR GANGWAR)

(a) to (e): The Cabinet in its meeting on 15 th February, 2017 has approved the proposal of acquisition of subsidiary banks of SBI i.e. State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore with State Bank of India. It shall come into effect on 1 st April, 2017. The merger  is  aimed  at  economies  of  scale  and  operational  efficiency  leading  to  improved  supervision  process, compliance and productivity in addition to better risk management.

Detailed plans have been chalked out for re-organisation of SBI network including branches of the Associate Banks.

The aggregation of credit exposures by six entities and its oversight by one entity, post merger, imparts focus and helps in better management of the overall credit portfolio especially stressed assets.

Unified  operations  and  efficiency  improves  productivity,  customer  service  and  profitability.  The  existing customers of Subsidiary Banks will have access to SBI global network which has presence in all the time zones.

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