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.
The scrip of State Bank of Mysore jumped 4.66 per cent, State Bank of Travancore gained 4.21 per cent, State Bank of Bikaner rose by 3.48 per cent and SBI was up 0.65 per cent on BSE.
During the day, these stock went up by up to 13.5 per cent.
Seeking to create a global-sized bank, the Cabinet on Wednesday gave the go-ahead to the merger plan of SBI and its five associates.
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).