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| Details |
Case Code: CLFIN007
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| Case Length: 6 pages |
| Period: - |
| Pub Date: 2016 |
| Teaching Note: Not Available |
| Subject : Finance |
| Price:Rs.100 |
| Organization :State Bank of India |
| Industry :Banking, Financial Services |
| Countries : - |
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Merger of SBI and Its Associates: Challenges Ahead |
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| In Mid-2016, the Indian government approved the merger of State Bank of India (SBI), the largest bank in India with its 6 associate banks. . This merger had created a banking powerhouse with a balance sheet size of Rs. 37 trillion. On one side, merger brought many opportunities to SBI especially in the area of increasing operational efficiency while on the other hand; it also throws up some challenges especially in the form of NPA management and HR issues which it has to overcome quickly to realize the benefits of the merger. The case provides sufficient scope to discuss challenges faced by senior officers of SBI to ensure the success of the merger.
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Issues: |
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- Analyze the challenges faced by SBI in merger process.
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- Analyze the various possible synergies from the merger.
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| Introduction |
| In June 2016, the Indian government approved the merger of six banks with the State Bank of India (SBI), the largest bank in India. The banks to be merged were State Bank of Bikaner and Jaipur (SBBJ), State Bank of Travancore (SBT), State Bank of Mysore (SBM), State Bank of Patiala (SBP), State Bank of Hyderabad (SBH) and Bharatiya Mahila Bank (BMB). This merger would create a banking power house with a balance sheet size of Rs. 37 trillion. While speaking on the importance of the merger, Arundhati Bhattacharya (Bhattacharya), Chairperson of SBI, said, “Currently, no Indian bank features in the top 50 banks of the world. With this merger, some visibility at global level is likely to increase. Customers of associates and subsidiaries of the Bank will also be beneficiaries.” On the other hand, credit rating agency Moody stated that the merger would have very little impact on the assets quality, capitalization, and financials of SBI as the bank already fully owned SBH and SBP and held a majority stake in other associate banks...
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Keywords |
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State bank of India, Merger and Acquisition, Associate Bank, Challenges, Synergies, Non-Performing Assets, Employees Management, Accounting Policies, Employee Unions, Leveraging Technology, Amalgamation
* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US
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