State Bank of India said the corporate branches of its five associate banks will “fold up” into the parent bank as part of network rationalisation after their merger.
“To a large extent, they will fold up into the corporate branches of the parent. As much as 60-70 per cent of the larger value accounts are common and you need only one relationship manager for that,” SBI Managing Director B Sriram told reporters.
He termed the corporate branches of the associate banks as “low-hanging fruit”, as a more elaborate plan will have to be prepared for the retail branch rationalisation.
SBI Chairman Arundhati Bhattacharya reiterated that the merger will take place this fiscal. The SBI Group 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.
She also said the merger of Bharatiya Mahila Bank will also be completed this year.
There is no particular bias per se between the unlisted and listed associates, and all the mergers will happen together or in quick succession, she said.
“All mergers will be done at the same time. It may not be absolutely on the same day, that may not be feasible. But it will be done in a very short space and all of them will happen almost one after another,” Bhattacharya said.
Earlier, speaking at an event to mark the 61st foundation day of SBI, Bhattacharya said the lender is stepping into a “very important year” which will see its size grow by a third due to the merger, which will catapult it into the elite club of the world’s top 50 banks.
SBI’s merger with associate banks, which is being opposed by the unions, will create a banking behemoth with an asset base of Rs 37 trillion or over USD 555 billion.
Kerala Legislative Assembly has passed a resolution condemning the merger plan, saying the State Bank of Travancore is core to the state’s identity, which will be lost with the merger.
Bhattacharya, whose name is being touted as a possible successor to RBI Governor Raghuram Rajan, said none of the SBI officials are “irreplaceable”.
“We work very much as a team and therefore anything and everything can be done without any of us, none of us are really irreplaceable,” she said.
She had said yesterday that SBI has “very good line-up of people” and “work will go on no matter who will be there”.
Reports also said Bhattacharya may get an extension in view of the ongoing merger process.
However, she refused to comment about her possible candidacy for the post of RBI Governor. “Let the social media speculate whatever it wants to,” she said.
SBI’s top echelon has the chairperson and four managing directors—VG Kannan, B Sriram, PK Gupta and Rajnish Kumar. Kannan will retire by the end of this month.
Meanwhile, Sriram said the bank will be relying largely on the retail segment to achieve a credit growth of 12-14 per cent this fiscal.
The bank plans to grow its retail book by 20 per cent (as in the previous fiscal), large corporates by 14-15 per cent, and push up the credit growth in the SME, agri and mid-corporate segments to double-digits, Sriram added.