Post the approval the bill will repeal the SBI (Subsidiary Banks) Act 1959, State Bank of Hyderabad Act 1956 and will further amend the State Bank of India Act, 1955, following the merger of five associates with the parent SBI.
“With the merger, the SBI has come in the list of top 50 banks globally and is ranked at the 45th position,” said Minister of State for Finance Santosh Gangwar.
“The merger will bring about increased capital base and increased the ability to give loans. Also, small banks will get access to products like mutual funds,” he said.
During the last two years, 29 crore bank accounts were opened, of which 25 per cent were zero balance accounts, he said, adding that farm loans increased from Rs 3.5 lakh crore in 2009-10 to Rs 10.65 lakh crore in 2016-17.
“We want every person to have access to banking services …No bank branches will be closed down, rather wherever required, we will open branches,” Gangwar said.
He said the merger will help increase SBI’s scope of operation and will pose a challenge to private banks as it will work as per the requirements of the people. “The merger has been planned keeping in mind the benefit of people and going forward its benefits will be seen,” he added.
According to the developments so far on the State Banks (Repeal and Amendment) Bill 2017, after the acquirement of the subsidiary banks by SBI, the existence of the subsidiary banks have been ceased and, therefore, it is necessary to repeal the State Bank of India (Subsidiary Banks) Act, 1959 and the State Bank of Hyderabad Act, 1956.
With the merger, SBI’s total customer base increased to 37 crore with a branch network of around 24,000 and nearly 59,000 ATMs across the country.
The SBI post merger began its operations with a deposit base of more than Rs 26 lakh crore and advances level of Rs 18.50 lakh crore.
The bill proposes omission of the mandate for suggested under the State Bank of India Act, 1955, earlier applicable on SBI and its associates.
“Therefore, certain amendments are necessary for the said Act in so far as they relate to the subsidiary banks. The amendments are consequential in nature,” it said.