The Banking industry in India is going to through economic corrections. Almost every small and medium-sized bank is wishful of being acquired, as it is a chance to expand their branch network and scale up operations. Their mergers, however, come with their own set of complexities and challenges.
Back in the year 1991, the Narasimhan Committee report on banking reforms advocated the need to consolidate banks in India through mergers and acquisitions. The former Governor of the Reserve Bank of India had specific recommendations. He suggested a banking structure in India with three levels. At the bottom will be smaller banks operating in the interiors of the country, about 8 to 10 banks of national scale functioning at the middle level. At the upper level, there will be three large banks with significant international presence.
Later on, P.J Nayak Committee also recommended on the similar lines. Since 1985, the Indian Banking Sector has seen at least 49 mergers.
From April 1, 2017, the State Bank of India commenced the merger process of its five associate banks and Bhartiya Mahila Bank. These five associate banks are State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and the State Bank of Travancore. The whole process of SBI merger, it was expected will take three months to complete. Mergers of such large scale are executed in phases. The data integration, the issuance of new passbooks and Cheque books, are processes that take time. It is expected that nearly 1500 branches need to be shut down due to duplication.
SBI merger has made the State Bank of India amongst the top 50 banks globally regarding assets. State Bank of India’s total customer base is now of 37 crores with approximately 24,000 branches and 59,000 ATMs across the country. The new entity will have a deposit base of more than Rs.26 Lakh crore, and about Rs 18.50 Lakh crore advances.
The State Bank of India- associate merger has lead to the strengthening of the banking sector, and this consolidation of public sector banks will eventually make the Indian Banking Sector more robust. Post-merger, SBI is all set to emerge as a banking powerhouse. A common treasury and skilled resource base will benefit in more ways than one.
New technology and services will now be simultaneously available to all 37-40 crores customers, initial hiccups regarding the issuance of new cheque books, passbooks, and IFSC Code will give way to better customer services. Not only customers but all stakeholders gain to benefit. The shares are projected to post tremendous earning at the stock exchanges. The cost of capital and the cost of operations in also likely to come down a few notches.
We will have a bank, with operations spreading over the length and breadth of the country alongside significant global presence. While the whole process of the SBI merger might not have been entirely seamless but it is a step in the right direction.

State Bank Of India has been in news for its Merger with its own associate banks which are State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Raipur, State Bank of Travancore, State Bank of Hyderabad and also the Bhartiya Mahila Bank. The same was effective from 1st of October, 2017. The merger of all these banks was approved back in February in 2017. With the merger of all the banks into effect makes State Bank of India has one of the highest total assets which are worth of 29 Lakh Crores.
Managing Director of SBI Rajnish Kumar said,
"The merger has to be done in phases. As data are integrated, the new passbook and Cheque books would be issued. The complete integration of various banks should take 3 months."
Around 10 years ago SBI merged with State Bank of Saurashtra exactly in 2008 and two years later in 2010 they merged with State Bank of Indore. According to the merger plan, SBBJ shareholders are going to get 28 shares of SBI with the value of 1 Re. each. While SBM and SBT shareholders are getting 22 shares each of SBI.
The bank will now have over of 37 crores of customer base with a branch network of more than 24,000 branches all over India. With a total of 59,000 ATM all over the country, SBI happens to be the biggest in terms of ATM Network.
As a part of the merger, many branches are said to be relocated which will be done in order to comfort the customers. If you are having an account in any of the merger banks then you must keep a note of the following things:

• Cheque Books and Post-Dated Cheques will be invalid: From 1st October 2017, the Cheque books are invalid, hence all the post-dated Cheques will become invalid. All the Cheques must be reissued with the one of the new SBI one. Account holders can apply for the Cheque book via Mobile Banking, Net Banking, and ATM or by visiting the branch office.


• Electronic Clearing Service – ECS: ECS Facility must be remaining the same despite the merger and the bank will sort the same at the back end. But there is no confirmation from SBI so you must wait for the same or ask for the information from the nearby branches.


• Mobile Banking and IFSC Codes: All the IFSC Codes of the merged banks will be invalid and new IFSC Codes of the SBI Branch will be given. As the IFSC Codes are invalid the Mobile Banking facility will also become invalid and you will have to wait for a few days to get Mobile Banking enabled again on your handset.


• Fixed Deposits: FD’s always have been untouched in the past also with the mergers and hence this time there will be no changes in the same. These are all the points, which are to be known about the SBI Merger with the other 6 banks.