The State Bank of Hyderabad, the largest associate of the State Bank of India, does not foresee scope for its merger with the SBI in the immediate future.
“There is no indication as such,” SBH Managing Director M. Bhagavantha Rao has said. The statement comes in the light of SBI chairman Pratip Chauduri’s remark on Monday that the bank would consider merger of five associate banks in the second quarter of the current fiscal.
Mr. Bhagavantha Rao felt that there had to be economic rationale behind the merger proposal as “merger as a philosophy may favour sometimes and may not at other times.” The issue of amalgamation had been in the air for quite some time and consequently, the SBH had to put on hold its IPO proposal.
He concurred with Mr. Chauduri’s assertion that economic logic for merger was as strong as ever before and the amalgamation of State Bank of Saurashtra, followed by State Bank of Indore, had benefited the banks as well as the SBI. “Consolidation makes economic sense. While three Chinese banks figure among the top 10 banks in terms of size, not a single Indian bank finds place in the top 20,” he said.
5 all-women branches
The SBH, Mr. Bhagavantha Rao said, would be shortly opening five all-women branches in line with the government’s announcement to open an exclusive bank for women. These branches would be located in Hyderabad, Visakhapatnam, Bangalore, Pune and Salem (Tamil Nadu).
This would in addition to launch of platinum savings bank accounts wherein the account holders would be given a gold card that would come with several facilities, including multi-city cheques, small locker free of cost for the first year and cut in the rates of interest availed by the holders.
On the credit portfolio, he said the bank had decided to be extremely cautious in lending to power sector as also the gem & jewellery segment where certain pressures were developing. “These sectors don’t give you too much confidence. It is a feeling of disquiet,” he said.