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March 21, 2017

Bharatiya Mahila Bank is going to merge with SBI

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To ensure greater banking services outreach to more women, the government today announced that it has cleared the merger of 3 year old Bharatiya Mahila Bank (BMB) with India's largest lender State Bank of India (SBI). "The decision has been taken in view of the advantage of the large network of SBI," the Finance Ministry announced in a statement.

Set up in 2013, the Bharatiya Mahila Bank was considered to be a pet project of the congress government. Its inauguration was attended by the then UPA chairperson Sonia Gandhi.  In the last three years since BMB was established, it has extended loans of Rs 192 crores to women borrowers, while the SBI group has provided loans of about Rs 46,000 crore to women borrowers.

With over 20,000 branches and the lowest cost of funds among banks, SBI has a total workforce of around 2 lakh employees of which 22% are women. Bharatiya Mahila Bank had a loan book worth Rs620 crore and deposit base worth Rs927 crore at the end of March 2016.

The SBI is already in the process of amalgamating its five associate banks. The government on 23 February announced that 1st April will be the record date for the merger of SBI with five of its associate banks - State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Hyderabad and State Bank of Patiala. All the shares of these associate banks would cease to exist as individual entities and would stand transferred to SBI.

The RBI on Monday said that all branches of associate banks will now function as branches of SBI.After the merger with its associate banks, SBI is set to be among the top 50 large banks of the world. SBI was ranked 52 in the world in terms of assets in 2015, according to Bloomberg, and a merger will see it break into the top 50.

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