Business Standard

Need Rs 3,000 cr to merge one associate bank this year: Pratip Chaudhuri

A committee headed by S Vishvanathan would report to the board and will finalise the name

BS Reporter Mumbai
The State Bank of India (SBI) today said it would need up to Rs 3,000 crore to merge one of its associate banks with itself, adding that one of these banks would be merged  this year.

Pratip Chaudhuri, chairman of SBI, told shareholders during the annual general meeting (AGM): “SBI will need Rs 1,000 to Rs 3,000 crore in capital if it were to merge one of its associate banks with itself.”

After the AGM, Chaudhuri told reporters a committee headed by S Vishvanathan, managing director (associates and subsidiaries) at SBI, is looking into all the aspects. “That committee would report to the board (and) then we will finalise the name.”
 
When asked whether it would be a listed entity or an unlisted one, Chaudhuri said: “We have an open mind.”

Currently, SBI has five associate banks – State Bank of Hyderabad, State Bank of Bikaner and Jaipur, State Bank of Patiala, State Bank of Travancore and State Bank of Mysore.

Out of these, State Bank of Hyderabad and State Bank of Patiala are unlisted while rests are listed.

Earlier there were speculations that bank might first prefer to merge unlisted entities first as they completely owned SBI. But Chaudhuri cleared the air by saying all aspects will be looked into and it has open mind over the issue.

Incidentally Chaudhuri had a key role in merging in another associate bank State Bank of Saurashtra in 2008 as its managing director. Seventh associate bank, State Bank of Indore was merged in 2010.

On SBI's own capital raising plans this year, he said a decision would be taken by next month.

According to Chaudhuri, the recent depreciation in rupee was a result of global phenomenon and not restricted to India. "I think it’s not a reaction to India, it’s a reaction overseas everywhere” he said.

“Some of the money is headed back to US (and) all the markets including England, Germany all have lost substantially," Chaudhuri said, adding that it affects India more because of our dependence on the inflows.

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First Published: Jun 22 2013 | 12:34 AM IST

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