4 Dec 2009, 1751 hrs IST,
NEW DELHI: The Indian government has given approval
to State Bank of India to initiate the process of
acquiring one of its associate lenders,
State Bank of Indore, the junior finance minister
told lawmakers on Friday.
SBI, India's largest bank, has already acquired one
of its subsidiaries - State Bank of Saurashtra. It has six
other associate banks and plans to take over all associates
eventually. "SBI has already initated the process,"
Namo Narain Meena told the lower house of parliament
in a written reply.
State Bank of Indore had informed the Bombay Stock
Exchange on Oct 31 that its board had approved the
proposed acquistion of the bank by SBI, including a
share exchange ratio proposing allotment of 34 equity
shares of SBI in lieu of every 100 equity shares of
State Bank of Indore.
The minister said bank employees' unions have expressed
apprehensions over the proposed consolidation in the
banking sector, particularly state-run banks.
"Some of the apprehensions are closing of bank branches,
retrenchement of existing employees, regional sentiments
about some particular banks, etc," he said.
He also said government has not given "direction to any
specific bank to consider proposal for merger or
amalgamation with a particular bank."
The initative for consolidation had to be taken
by the managements of the banks and government
would play a supportive role as the common stakeholder.
Source:REUTERS
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