The merger of State Bank of Hyderabad (SBH) with its parent bank, State Bank of India (SBI) is unlikely in near future. “There is no such proposal on cards now,” said SBH Managing Director (MD) Santanu Mukherjee.
He was in the city to inaugurate an e-Connect lobby and commercial branch on Tuesday. The merger was not possible given the bank's performance and capital issues.
All the banks were performing well and were not stressed out. The merger may not be ideal proposal for present day situation. The merger would bring down the capital, he felt.
It may be recalled that the merger of SBH, which tops the five associate banks in performance, with its parent has been under active consideration for long. The SBI owns entire share capital of the SBH.
Mr. Mukherjee said that the SBH had stepped up efforts to rein in Non-Performing Assets (NPAs). All the branches were asked to go to villages and lay emphasis on recovery of NPAs. More so, the State Government had set the ball rolling by kick-starting debt redemption. It would take more than a month for release of funds etc. It would help in roll over of agricultural loans and eliminating the NPAs, he added.
The banker, however, said that it was not possible to arrive at a figure on what portion of agricultural loans turned into NPAs. “I am quite optimistic about the outcome of our ongoing efforts to tame the NPAs by the end of current financial year,” he said.
On infrastructure projects, Mr. Mukherjee said that there was a delay in take off of infrastructural projects for various reasons including environmental clearances. It appears that the infrastructure projects would do better this year. The situation should be fine by mid 2015, he felt.
