Clean up books before merger, SBI directs associate banks

State Bank of India, country’s largest state-run bank, has directed five of its associate banks to clean up their books before the proposed merger takes place. This led to these associate banks facing combined losses worth Rs 2,018 crore in the first quarter ending June this year.

As per senior officials from SBI, the associate banks were asked to align the classification of loans with SBI, no matter their losses.

Also read: SBI is shutting down its branches like never before. Here’s why

"Post-merger, an account can't be classified as standard in the books of one associate bank and sub-standard for another associate bank or parent bank," a bank official told ET. "There is a need that all associate banks align their accounts prior to merger."

It was in the mid of May this year that SBI announced that State Bank of Patiala, State Bank of Mysore, State Bank of Travancore, State bank of Bikaner and Jaipur and State Bank of Hyderabad and Bharatiya Mahila Bank would be merging with it by March 2017, marking the first time that six banks would be merged with SBI in one go.

Also read: ​ Unbanked rural India is next on the SBI radar

Image source