Cabinet approves merger of State Bank of Indore with SBI

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.

With this merge happening between the two banks, SBI being State Bank of Indore's parent bank, SBI will share a swap ratio of 34:100, agreeing to give away 34 of its shares for every 100 shares from the State Bank of Indore, which is held by a few shareholders.

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. 634.96.

After the merger, SBI will have only five associate banks left with it.