SBI plays down reports of Bharatiya Mahila Bank merger

SBI chairman Arundhati Bhattacharya says she does not know the basis of reports

State bank of India, the country’s largest lender, on Tuesday played down reports about the government’s move to merge public sector bank Bharatiya Mahila Bank (BMB) with itself.

“I do not know the basis of it (reports of merger of BMB with SBI) and have not yet been approached for it,” SBI Chairman Arundhati Bhattacharya told reporters.

“Media is reporting that this is something they are discussing in government (Cabinet). Having said that, BMB has Rs 1,000-crore capital and loan book must be about Rs 150-200 crore. It does not have non-performing loans and has very few branches. It is a small entity as of now. So we will see,” Bhattacharya said during a press conference to announce a tie-up with travel portal Makemytrip.com.

According to media reports, the Union Cabinet will soon take up a proposal to combine the New Delhi-based BMB with SBI. BMB was a brainchild of the previous Congress-led United Progressive Alliance government, which was inaugurated by then Prime Minister Manmohan Singh in November 2013.
 
Adding fuel to reports of a merger is the recent development of BMB Chairman and Managing Director Usha Ananthasubramanian appearing for interviews conducted to select managing director and chief executives for five large public sector banks.

BMB — the country’s only all-woman bank — was founded to focus on lending to women in the country. It has 62 branches with the last one being inaugurated on May 27.

In July 2014, Finance Minister Arun Jaitley had said the government will consider suggestions for the “consolidation” of state-run banks.

Meanwhile, SBI is in advanced talks with foreign partners in insurance ventures for the latter raising their stake. Bhattacharya said Insurance Australia Group (IAG), with which the bank has partnered for the general insurance business, will be raising its stake to 49 per cent.

In SBI General Insurance, SBI owns 74 per cent while IAG holds the remaining 26 per cent.

IAG has given a call for exercising their entire option of 49 per cent. The valuation is going on, she said adding that IAG will also increase stake by buying SBI's stake.

SBI said BNP Paribas Cardif, its partner in the life insurance business, is keen to increase stake by 10 per cent to 36 per cent. SBI holds 74 per cent stake.

BNP Cardif will increase its stake by buying SBI's shares in the life insurance business and there will be no fresh capital infusion. “It will be a sale of our equity stake. We will encash our stake,” Bhattacharya said.