| The Union Cabinet today gave its approval to amend the State Bank of India (Subsidiary Banks Laws) Amendment Bill, 2006 to give its subsidiaries flexibility to raise resources.
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| The bill is understood to have sought a change that would facilitate reduction in the State Bank of India’s (SBI) shareholding in its seven subsidiary banks from a minimum of 55 per cent to 51 per cent.
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| The subsidiary banks will also be allowed to raise funds through preferential allotment or private placement or public issue.
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| The bill was introduced in the parliament in May, 2006 to enhance the flexibility of the board of directors, improve corporate governance and provide power to the boards of the subsidiary banks to frame regulations.
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| The cabinet’s approval to carry out amendments to the bill is on the basis of the recommendations of the Standing Committee to the State Bank of India (Subsidiary Banks Laws) Amendment Bill, 2006.
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| The amendments would bring the operations of subsidiary banks in tune with the changed scenario and modern business practices.
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| The seven subsidiary banks of the SBI are: the State Bank of Saurashtra, the State Bank of Hyderabad, the State Bank of Patiala, the State Bank of Bikaner and Jaipur, the State Bank of Indore, the State Bank of Mysore and the State Bank of Travancore. |
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