Pratip Chaudhuri Chairman of State Bank of India (SBI) informed reporters that the capital condition of the bank is favourable for the merger of its associate banks with itself.
Without giving a timeline for the merger, he said the bank is now open to merging its associate entities. The move will further enhance its already enormous balance sheet.
When asked which of the remaining five associates would be considered first for merger, he said all five fingers are the same for SBI.
Two associate banks, State Bank of Saurashtra and State Bank of Indore, were merged with SBI during the tenure of former SBI Chairman OP Bhatt.
SBI’s tier I capital (equity and reserves) had fallen to 7.9 percent—lower than its internal target of 8 percent—after it nearly slipped into losses in the March 2011 quarter.
Government infused Rs 11,900 crore capital into SBI in two years and it ploughed back Rs 11,700 crore profit last year, which improved its capital position.
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