Government approves merger of State Bank of Saurashtra with SBI

July 24th, 2008 - 7:51 pm ICT by IANS  

A file-photo of Manmohan Singh

New Delhi, July 24 (IANS) The government Thursday approved the merger of the State Bank of Saurashtra with the State Bank of India (SBI) to enable it effectively face competition arising out of globalisation. The merger will be effected through the State Bank of India (Subsidiary Banks Amendment) Bill, 2008 to be tabled in parliament, Information and Broadcasting Minister Priya Ranjan Dasmunsi told reporters after a cabinet meeting presided over by Prime Minister Manmohan Singh.

The merger will enable SBI “to up-scale in terms of footprint, manpower and other resources,” Dasmunsi said.

“It will also enable (SBI) to face competition arising from globalization of the economy, apart from augmenting efficiency and enabling better management of risk,” he added.

The government separately approved amendments in the statute to bring the operations of the SBI and its subsidiary banks “in tune with the changed scenario and modern business practices”.

This would be done by amending the State Bank of India (Amendment) Bill that was introduced in the Lok Sabha on December 18, 2006 “to provide clear provisions to enable the Reserve Bank of India to prescribe fit and proper criteria for elected directors”, Dasmunsi said.

This apart, the State Bank of India (Subsidiary Banks) Act, 1959 would be amended following the transfer of ownership of the SBI from the Reserve Bank of India to the central government, the minister added.

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