Merger of associates will improve asset base of SBI to Rs 21.9 lakh crore and can add 5,658 branches to its 15,143. Even market share will rise to 24 per cent. Moreover, the SBI management considers that ‘the time is very conducive now’.
According to SBI Chairman Arundhati Bhattacharya, if one likes to do something, first he should look at internal and make it better form and start looking at other areas. She felt the time is approaching for a relook for merger.
On the issues being faced by the banking sector, Bhattacharya said, fresh capital of $50 billion required in the next five years. As the economy is turned around the profitability of the banking sector will improve, which boost the capital.
There are number of ways to raise capital and to enhance the strength of the bank, the government may have to dilute its stake thus allowing the banks to raise capital from money market.
SBI's five associates are State Bank of Travancore, State Bank of Hyderabad, State Bank of Patiala, State Bank of Bikaner & Jaipur and State Bank of Mysore.
Although consolidation was first mooted about a decade ago, nothing much happened with the staff unions being a stumbling block.
