Customers of the five associate banks of SBI might not be able to access some branches, for the SBI plans to shut down around 47% of these associate bank branches. The move comes after the five associate banks, namely State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Bikaner and Jaipur (SBBJ), State Bank of Patiala (SBP), and State Bank of Travancore merge with the SBI on April 1.
The primary aim behind this move is to ensure there is no overlapping of branches in a given area. The restructuring will see around 122 branches of these banks shut down. According to the SBI these associate banks have a total of 259 branches across the country.
The SBI, which has 550 branches aims at having a combined total of 687 branches post the merger. The move will affect around 1,100 employees, whom the SBI will deploy in other operations. Employees who do not wish to be redeployed can also opt for a Voluntary Retirement Scheme (VRS).
While the banks will legally cease to be entities on April 1, the merger process will take a further 20 days to start. This is on account of tallying of the balance sheets to compute the assets and debts. Merging the data from the banks would take over a month, with other merger-related processes to be done within six months.
SBI will have an asset base of over Rs.40 lakh crore post the merger, listing it among the top 50 banks in the world. This isn’t the first time associate banks have merged with the SBI, with State Bank of Indore and State Bank of Saurashtra merging with it in 2010 and 2008 respectively.