Question: Which one of the below is not among five banks approved to be acquired by State Bank of India?
(a) State Bank of Hyderabad
(b) State Bank of Mysore
(c) State Bank of Patiala
(d) Bank of India
Ans: (d)
- On 15th February, 2017, The Union Cabinet, chaired by the Prime Minister Narendra Modi approved the acquisition of 5 subsidiaries bank namely State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore by State Bank of India (SBI).
- The Cabinet also approved the introduction of a Bill in Parliament to repeal the State Bank of India (Subsidiary Banks) Act, 1959 and the State Bank of Hyderabad Act, 1956.
- The merger is likely to result in recurring savings, estimated at more than Rs. 1,000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds.
- The acquisition of subsidiary banks of State Bank is an important step towards strengthening the banking sector through consolidation of public sector banks.
- It is in pursuance of the Indradhanush action plan of the Government and it is expected to strengthen the banking sector and improve its efficiency and profitability.
- It is to be noted that Indradhanush Action Plan is a 7-pronged strategy to address the challenges in public sector banking system.
- Benefit:
- The acquisition under Section 35 of the State Bank of India Act, 1955 will result in the creation of a stronger merged entity.
- It will create improved operational efficiency and economies of scale.
- It will also result in improved risk management and unified treasury operations.
- Existing customers of subsidiary banks will benefit from access to SBI’s global network.
- The merger will also lead to better management of high value credit exposures through focused monitoring and control over cash flows.
Reference:
http://www.thehindubusinessline.com/money-and-banking/nod-for-acquisition-of-5-subsidiaries-to-turn-sbi-into-a-global-sized-bank/article9545095.ece
http://pib.nic.in/newsite/PrintRelease.aspx?relid=158491
http://financialservices.gov.in/PressnoteIndardhanush.pdf