New Delhi: One of the five connect banks of the country`s top lender,
the State Bank of India (SBI), is set to combine with the close relative this economic.
State Bank of Patiala is the most likely suitor, a top banker has said.
"We have no issue with a merger. We are ready for it," said organization director of State Bank of Patiala S.A. Ramsey Rang an. "One of these five associates will be complex with the SBI this financial year," Rangan told IANS in an conference.
The government-run State Bank of India has five associates -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.
"We have no issue with a merger. We are ready for it," said organization director of State Bank of Patiala S.A. Ramsey Rang an. "One of these five associates will be complex with the SBI this financial year," Rangan told IANS in an conference.
The government-run State Bank of India has five associates -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.
Out of these five, three of them are scheduled -- State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore. According to finance ministry officials in, State Bank of Patiala is the first in the row.
But Rang an clarified that neither the government nor the SBI has yet approached his bank for the probable union.
"We have not been asked yet. I don`t know which one will be the first. But one thing is obvious, one will be compound this year and with any luck other one next year and steadily all the five associates have to merge," said Rangan.
In the countrywide financial plan obtainable July 10, Finance Minister Arun Jaitley had oblique at mergers of public sector banks. "There have been some suggestions for consolidation of public sector banks. Government, in belief, agrees to consider these suggestions."
Rangan, however, said mergers won`t be simple.
"The five associate banks of SBI mutually have just about 75,000 staff. Each one of them has a unlike work society. So the merger is not an easy job," he said. "To make certain smooth fusion, the government may opt for one bank at a time."
He also said banks must be recapitalized and strengthened before a take-over.
Asked which associates of SBI should be agreed main concern, Rangan said: "I for myself feel the bank with the stronger balance sheet should be given precedence. Those that are weaker should be strengthened."
Two of the SBI`s subsidiaries had previously been fused in the past. The State Bank of Saurashtra in 2008, and the State Bank of Indore in 2010.
Rangan said mergers of associates will help SBI gain a trustworthy position in the worldwide banking system and stay put pertinent in the rising monetary scenario. None of the Indian banks is between the top worldwide lenders.
The Size of SBI is less than one one-sixth of the Bank of America.
Rangan, who had also worked in the economics ministry in a elder location, said consolidation would help Indian lenders raise requisite funds for development.
According to the finance ministry, public sector banks need equity capital mix of Rs.2,40,000 crore by 2018 to be in line with Basel-III norms. growing stress on public sector lenders due to loan defaulters is a major worry among all banks.
"All commercial banks`s financials are under stress. Non-performing property have risen stridently in the past five years. I am expectant that the things would perk up regularly in the coming years with the restoration in the market," he said.
The senior banker said big corporate houses, remarkably those in communications business, were the biggest defaulters. Indian banks` introduction to communications stands at about 40 percent of the total lending.
"Majority of transportation projects have been delayed due ecological clearances and some other issue. We hope, the things will move quicker under the new government."