In a move that can potentially trigger a major consolidation in India's state-run financial services space, the board of State Bank of India (SBI) on Thursday approved the swap ratio for taking over four banks—three of its associate banks as well as the Bharatiya Mahila Bank Ltd (BMB).
The news of the development came after the close of trading hours of Indian bourses.
The SBI had earlier announced its decision to take over all its five associate banks— State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT) and BMB.
However, on Thursday SBI announced the swap ratio only for SBBJ, SBM, SBT and BMB.
As per the ratio, SBI will swap 28 of its equity shares for every 10 equity shares of SBBJ; 22 shares for every 10 shares of SBM and SBT, respectively, and 4,42, 31,510 shares for every 100 crore shares of BMB.
Out of the five associate banks only SBBJ, SBM and SBP are listed with the presence of minority shareholders.
In mid-June, the government approved in-principle the proposal for the merger of six banking entities with the country's largest lender, which State Bank of India chairperson Arundhati Bhattacharya hailed as a "win-win" for all.
The two banks that have not figured on Thursday's list are State Bank of Hyderabad and the State Bank of Patiala.
