NEW Delhi, July 21 (PTI): The government on Thursday approved merger of State Bank of India Commercial and International Bank Ltd (SBICI) with its parent bank SBI. SBICI, with two branches, is a wholly owned subsidiary of State Bank of India (SBI) and functions as a private sector bank offering an array of financial products and services. “It’s performance over the period of its existence has not been consistent. It has not paid any dividend since its inception...In the overall analysis, continuation of SBICI in its present form would not create a substantial organisation with a separate niche,” information and broadcasting minister, Ambika Soni told reporters after a Cabinet meeting here.
So also as an independent bank, SBICI has had to maintain a full-fledged, elaborate administrative setup to conform to regulatory requirements, she said, adding, the cost of maintaining such a structure is disproportionate to the level of operations of the SBICI. The proposed merger will help in maintaining the administrative structure of SBICI as both its branches in Mumbai will be easily absorbed in the operations of the parent entity, she said. While no present beneficiary of its parent SBI would be affected, the number of clients of SBICI will have access to the bigger network of SBI, she said.
So also as an independent bank, SBICI has had to maintain a full-fledged, elaborate administrative setup to conform to regulatory requirements, she said, adding, the cost of maintaining such a structure is disproportionate to the level of operations of the SBICI. The proposed merger will help in maintaining the administrative structure of SBICI as both its branches in Mumbai will be easily absorbed in the operations of the parent entity, she said. While no present beneficiary of its parent SBI would be affected, the number of clients of SBICI will have access to the bigger network of SBI, she said.
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