At the time of merger, between the two banks like state bank of India and state bank of Indore then it is approved by the government on Thursday. “The board of directors of State Bank of Indore has also passed a special resolution recommending the merger or acquisition of State Bank of Indore with or by State Bank of India,” SBI holds 98 per cent stake holder in State Bank of Indore, which has 503 branches.
SBI-State Bank of Indore merger
On 26th August 2010, officially declared that the State Bank of Indore merged into State Bank of India. All branches of State Bank of Indore will function as branches of State Bank of India from August 27, 2010. Customers, including depositors of State Bank of Indore will be able to operate their accounts as customers of State Bank of India with effect from August 27," the Reserve Bank of India said in a statement. The Government of India gave its in-principle approval for a merger between State Bank of India and State Bank of Indore in October 2009. On 15th July 2010, the Cabinet cleared the merger of between the sbi and state bank of Indore.
State Bank of Indore has a large number of branches not only in india but also in Madhya Pradesh and Chhattisgarh. SBI had also said the issued capital of SBI would increase from Rs 634.96 crore up to a maximum of Rs 635.08 crore. The Cabinet today cleared the merger of State Bank of Indore with its parent State Bank of India, a move that would help the country's largest lender to scale up operations and cut costs. As it is SBI is the India's largest lender. It also holds 98 per cent stake in State Bank of Indore. Following the merger, SBI will issue 1.16 lakh shares with a face value of Rs. 10 per share for each minority holder in the State Bank of Indore. The issued capital money of SBI will also be raised to at most Rs. 635.08 crore from its prior Rs. 634.96State Bank of Indore, including 83 branches located at different centres outside Madhya Pradesh and Chhattisgarh. For merger to take place, both the banks have to obtain permission from the sector regulator Reserve Bank of India.
The SBI had proposed a merger with State Bank of Indore last year, which had been approved by the SBI central board. After the approval, the Centre even gave an in-principal approval. And now recently, the Cabinet has given its approval over the merger too. SBI has already merged two of its associate banks with itself — State Bank of Saurashtra and SBI Commercial and International Bank with itself. “No other bank is lined up now,” said (SBI) chairman OP Bhatt.