SBI's board has approved share swap ratio for the proposed takeover of five units. Photograph: (Reuters)
SBI said the merger would expand its assets by 36% to about $447 billion
State Bank of India (SBI), the nation's biggest lender by assets, will gain $120 billion in assets following its merger with associate banks and Bharatiya Mahila Bank, the lender said in a statement on Saturday.
In a first move to consolidate the country's struggling public sector banks, SBI's board on Thursday approved the share swap ratio for the proposed takeover of five units that had been run at arms-length, as well as the state-run Bharatiya Mahila Bank, a bank for women set up in 2013.
Policymakers want to recapitalise and consolidate the country's state-run banks so that they can extend fresh credit and help drive an investment-led recovery in Asia's third-largest economy that is currently getting a boost from state and private consumption.
India's 27 public sector banks account for 70 per cent of its banking sector assets, as well as the lion's share of the country's $120 billion in troubled loans.
SBI said the merger would expand its assets by 36 per cent to about $447 billion.