State Bank of India (SBI) will start the new financial year with a Rs 33.5-lakh crore balance sheet, on merger of five associate banks and Bharatiya Mahila Bank with itself. The merged entity will find itself among the top 50 global lenders.
The five associate banks — State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore — will now work as a combined entity from April 1. The integrated entity will have 270,000 people on roll, with a network of 24,000 branches and 59,000 ATMs. The existing customers of subsidiary banks will have access to the SBI global network, which has a presence in all time zones.
The merger would lead to a synergy in operations and lower SBI’s cost of funds, which in turn would lead to savings of over Rs 1,000 crore in the first year.
Branch rationalisation consequent to the merger would be spread over in FY18. The first quarterly result for the combined entity would be filed in the June quarter.
Ahead of the merger, associate banks had rolled out voluntary retirement schemes (VRS) for their employees. This scheme will be available for those with 20 years of service or those who are 55 years of age as on February 28, 2017.
The VRS opened on March 22 and will close on April 5. Applicants will have seven days — till April 12 — to withdraw the application. Around 12,500 people are eligible under the scheme, roughly 17 per cent of the employees of all associate banks.