A senior Finance Ministry official has confirmed that the consolidation among public sector banks (PSBs) is expected to happen only after the completion of merger between the SBI and its associates.
“Banks can consider merger and acquisition only when their financial strength improves significantly. Logically, the next round of mergers and acquisition may take place after consolidation of associate banks and acquisition of Bharatiya Mahila Bank with SBI,” the official said.
According to the official, post-March 2017, when the balance sheet clean up exercise is likely to be completed, the banks’ financial performance should consequently see an uptick.
The merger of SBI with its associate banks is likely to happen towards the end of this fiscal. Last week, the Cabinet gave in-principle approval for the merger and acquisition of Bharatiya Mahila Bank.
SBI has five associate banks — State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.
