The Chairman, SBI, OP Bhatt said that the merger of its subsidiary banks with the parent will not happen in one go and they will take it up one at a time. He said that though there are no roadblocks in the merger of its subsidiary banks it is a time taking process and certain steps need to be followed before a merger is initiated.
He said that in the past the merger of two of its subsidiary banks with the parent, SBI, took about 2-3 years and therefore the merger of the remaining five subsidiaries would take about 3-5 years time.
Also the merger would be subject to governmental clearances and addressing concerns if any raised by certain quarters about SBI becoming too big a bank for a balanced economic system, Mr Bhatt said on Monday on a visit to the state capital.
With the Finance Minister proposing giving licenses to new private sector banks, Mr OP Bhatt said that a few more banks would only help the economy and there is enough space for each bank to grow. He said that the way the Indian economy is booming banking would also need to keep pace with the growth. In this scenario a few more banks which follow governance standards would only help in the overall growth of country.
He said that the Indian banking system has proven itself to be strong and has been praised after the aftermath of Lehman Brothers, and the new banks would come up in a closely monitored sector.
Mr Bhatt said that with inflation continuing to be a concern there seemed to be an upward bias towards an interest rate hike.
Mr Bhatt who was here as part of SBI’s 150th year celebrations, said that the bank had taken to spreading its network to the rural areas much before financial inclusion became a buzz word. He said that among other things they have introduced kiosk banking to spread its reach deeper into the rural parts of the country. He said that with economic progress trickling to rural India banking services were much needed in these remote locations. Also with many villagers still migrating to large towns, banking network was needed to send back remittances.
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