SBI, State Bank of Indore tie-up asked for clarifications

Concerns prompted Indian government to look for details of the merger.

The government has sought some clarifications on issues such as workforce integration from State Bank of India on its proposal to merge State Bank of Indore with itself. Issues such as cost benefit analysis on merger of the associate bank with the parent entity and employee integration among other things require clarity and were discussed with SBI, official sources said as stated in a report in The Hindu Business Line.

Besides, sources said, the government would also like to know the experience with regard to merger of the State Bank of Saurastra that was merged with parent SBI in August 2008. For merger to take place, both the banks have to obtain permission from the sector regulator Reserve Bank of India.

The Boards of the respective banks have already given in-principle approval for the merger in June this year. SBI initially had seven associates and with the merger of State Bank of Indore, the number would come down to five. State Bank of Indore is the smallest associate bank of the SBI Group after the merger of State Bank of Saurashtra.