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Lok Sabha passes bill facilitating merger of SBI subsidiaries

Author: IANS/Friday, August 11, 2017/Categories: Banking & Financial Services

Lok Sabha passes bill facilitating merger of SBI subsidiaries

New Delhi - The Lok Sabha on August 10 passed a bill to facilitate merger of five associate banks with the State Bank of India.

The State Banks Repeal and Amendment Bill, 2017, repeals two Acts -- State Bank of India (Subsidiary Banks) Act, 1959, and State Bank of Hyderabad Act, 1956.

These Acts established the State Bank of Bikaner, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore and State Bank of Hyderabad. These banks were subsidiaries of the State Bank of India (SBI).

The bill was passed consequent to the Union Cabinet granting its approval in February 2017, which allowed the SBI to acquire these subsidiaries.

Initiating the discussion, Congress member A.S.P. Muddahanumegowda lauded former Prime Minister Indira Gandhi's decision of nationalising the banks. Shivkumar C. Udasi of the Bharatiya Janata Party (BJP) said the bill would facilitate the working of SBI by acquiring some subsidiaries.

Saugata Roy of Trinamool Congress, however, questioned the government about the money deposited in banks after demonetisation and asked how much of it was in the SBI.

He also questioned why the SBI Chairman went to Australia with Prime Minister Narendra Modi, and alleged that he was there to approve a loan for a businessman from Gujarat.

Bhagwant Mann of AAP expressed doubt that after the merger, the SBI will acquire more non-performing assets.

N.K. Premachandran of Revolutionary Socialist Party expressed the fear that the merger might not be beneficial, and said that India did not need big banks. He said that in the United States of America, big banks had become the cause of turmoil.

Replying to the discussion, Minister of State for Finance Santosh Kumar Gangwar allayed fears over the merger leading to any problems in the bank in future and said the merger of the banks was done in the larger national interest.

"It will show good results in future," the minister said.

He also said that the government wanted to take the banks to the people's doorsteps.

"In the last two years, the doors of the banks have been opened for common people. Twenty nine crore new accounts have been opened in the country under the Jan-Dhan scheme, a fourth of which are zero-balance accounts," he added.

The bill was later passed by voice vote.

 

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S Vijaykrishnan
S Vijaykrishnan

IANS

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