Govt approves SBI acquisition of State Bank of Indore

The acquiring process of State Bank of Indore by its parent bank State Bank of India has got the approval of Indian government. This was informed by the junior finance minister to the lawmakers.

Earlier SBI, country’s largest lender had acquired one of its subsidiaries - State Bank of Saurashtra. There are six other associate banks and SBI plans to acquire all the associates eventually. Namo Narain Meena told the lower house of parliament in a written reply, "SBI has already initiated the process".

State Bank of Indore on Oct 31 had informed the Bombay Stock Exchange that its board as given its approval to the acquisition of the bank by SBI, including a share exchange ratio proposed allotment of 34 equity shares of SBI in view of every 100 equity shares of State Bank of Indore.

The minister informed but bank employees’ unions have expressed their concern over the proposed acquisition in the banking sector, especially the state-run banks. He stated, "Some of the apprehensions are closing of bank branches, retrenchment of existing employees, regional sentiments about some particular banks, etc".

He also informed that government has not given "direction to any specific bank to consider proposal for merger or amalgamation with a particular bank." The proposal for acquisition has to be taken up by the managements of the banks and government will just play a role of supporter, as the common stakeholder.