The Lok Sabha on Thursday passed the State Banks (Repeal and Amendment) Bill, 2017, which would pave way for the merger of five associate State Banks with the State Bank of India.
Minister of State for Finance Santosh Gangwar moved the Bill to repeal the State Bank of India (Subsidiary Banks) Act, 1959, the State Bank of Hyderabad Act, 1956, and to amend the State Bank of India Act, 1955, and said it would help State Bank of India to consolidate its position globally..
With this approval in the house, subsdiary State Banks would merge with SBI, increasing its capital base and its ability to give loans, Gangwar said while replying to the debate on the Bill. It would also allow small banks to have access to financial products including mutual funds, he said.
After the merger SBI would be in the top 50 banks at 45th position. He said the merger will help increase SBI’s scope of operation and will pose a challenge to private banks as it will work as per the requirements of the people. The merger has been planned keeping in mind the benefit of people and going forward its benefits will be seen, he said.
Five subsidiary State Banks– State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT) and the Bharatiya Mahila Bank merged with SBI from 1 April. Following the merger, the total customer base of SBI increased to 37 crore with a branch network of around 24,000 and nearly 59,000 ATMs across the country.
Gangwar assured the House that that no bank branch would be closed, in fact more branches may open in remote areas. However, if there is more than one state bank branch in one area, it may get merged into one.
He said farm loans have also increased from 3.5 lakh crore in 2009-10 to 10.65 lakh crore. On opening of bank accounts, Gangwar said during the past two years 29 crore bank accounts were opened of which one fourth were opened with zero balance.