Shares of SBI and its associates ended the day with as much as five per cent gains today after the Cabinet approved their merger, a step aimed at strengthening the sector through consolidation of public banks.
During the day, these stock went up by up to 13.5 per cent.
However, no decision was taken on the proposal to merge the Bharatiya Mahila Bank with SBI.
The merger of associate banks 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, an official statement said.
The two unlisted associate banks which will be merged with SBI are State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH).