New Delhi: The Narendra Modi cabinet on Wednesday approved the takeover by State Bank of India (SBI) of its subsidiaries, including the State Bank of Travancore (SBT), a government official said, in a first move to consolidate the country's struggling public sector banks.
As earlier proposed, SBI was to take over five units that had been run at arms-length, as well as state-run Bharatiya Mahila Bank, a bank for women set up in 2013.
When the merger gets implemented, SBI will become a bank with over 50 crore stakeholders and with business of over Rs 37 lakh crore. It will have have 22,500 branches and about 58,000 ATM counters.
India's 27 public sector banks account for 70 per cent of its banking sector assets, as well as the lion's share of the country's $120 billion in troubled assets.
Policymakers want to recapitalise and consolidate the state banks so that they can extend fresh credit and help drive an investment-led recovery in Asia's third-largest economy that is now being buoyed by state and private consumption.
SBI's board had already approved the takeover of State Bank of Travancore, State Bank of Bikaner and Jaipur, State Bank of Hyderabad and State Bank of Mysore as well as Bharatiya Mahila Bank.
Shares in all of the listed units rallied by between 19 and 20 per cent in trading on the National Stock Exchange in Mumbai on Wednesday.
(With agency inputs)
