Bharatiya Mahila Bank to be merged with SBI

The government on Monday announced its decision to merge Bharatiya Mahila Bank (BMB) with State Bank of India (SBI) to ensure greater banking services outreach to more women at a faster pace.

“The decision to merge BMB with SBI has been taken in view of the advantage of the large network of SBI among other things,” the finance ministry said.

In the three years since BMB was established, women have been extended loans of ₹192 crore by BMB and about ₹46,000 crore by SBI group. SBI has a reach of over 20,000 branches and the lowest cost of funds among banks. Out of its 200,000 workforce, 22% are women. SBI group has 126 allwomen branches across the country, while BMB has seven.

“The proportion of administrative and managerial cost in BMB is much higher to reach the same coverage. For the same cost, a much higher volume of loans to women could be given through SBI,” the statement said.

“This merger will help SBI get paid capital worth ₹1,000 crore lying on the books of BMB,” said Karthik Srinivasan, senior vicepresident, Icra Ltd. BMB had a loan book worth ₹620 crore and deposit base worth ₹927 crore at the end of March 2016.

“Although the addition of 103 branches of BMB and business of approximately ₹2,000 crore would not make significant impact on the branch network and business levels of SBI, it will be ensured that the merger strengthens and reinforces SBI’s focus on financing of women entrepreneurs in order to fulfil the objectives behind setting up of Bharatiya Mahila Bank,” said a statement from SBI.

The government on February 23 said April 1 will be the record date for the merger of SBI with five of its associates—State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Hyderabad and State Bank of Patiala.