State Bank of India to merge with subsidiary

India's largest bank not constrained by merger cost.

State Bank of India Chairman Pratip Chaudhuri said the bank is likely to merge at least one of its associate banks with itself by the end of this year. SBI is currently evaluating which of its subsidiaries would be the right candidate.

Chaudhuri said the only thing that held it back in the past is that the merger cost is about US$17.2 million to US$51.7 million. Now that the bank’s capital is close to US$1.7 billion, SBI can easily consider the merger.

SBI is currently in the process of finalizing which associate bank will be considered for merger first. It intends to determine this either in July orAugust and on the basis of this report, the merger procedure could start somewhere in September.

The merger will help SBI increase its network as each bank can bring in 700 to 1,000 locations.