Benefits of merger of SBI with its Associate Banks
The Cabinet in its meeting on 15th February, 2017 has approved the proposal of acquisition of subsidiary banks of SBI i.e. State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore with State Bank of India. It shall come into effect on 1st April, 2017. The merger is aimed at economies of scale and operational efficiency leading to improved supervision process, compliance and productivity in addition to better risk management. The existing customers of Subsidiary Banks will have access to SBI global network which has presence in all the time zones.
State Bank of India has informed that common legal action as well as restructuring efforts on consolidated exposures are expected to save cost and improve the possibility of resolution of bad loans. The employees of Associates Banks will be offered the option of continuing with the existing pension scheme or accept the pension scheme of SBI.
(d) & (e): Reserve Bank of India (RBI) has informed that the Committee on Financial Sector Reforms had envisaged differentiated banks to further financial inclusion, whose primary role would be to provide payment services and deposit products to small business and low income households. RBI has granted in-principle approvals to 11 entities to set up payments banks and 10 entities to set up small finance banks. As on date, RBI has granted banking licence to four payments banks and seven small finance banks.
With a view to increasing banking penetration and promoting financial inclusion and with the main objective of covering all households with at least one bank account per household across the country, a National Mission on Financial Inclusion named as Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched on 28th August, 2014. Further, the micro finance initiatives have resulted in generating income and alleviating poverty through creation of livelihood opportunities for the rural households. Besides, Government has implemented the Pradhan Mantri Mudra Yojana (PMMY) since April, 2015 to promote & ensure finance to the unfunded and underfunded segments of the economy wherein Micro Finance Institutions (MFIs) have played a significant role.