State Bank is finally started the process of amalgamation to become a major bank in India. Their are 7 State Banks in India. Process will start from State Bank of Saurashtra. The presence of this bank is basically in Saurashtra (Gujrat) region. But the number one bank in that region is Bank of Baroda.
State Bank of Saurashtra is the smallest bank in State Bank group also bank has not been registered in stock exchange so it will take less time for amalgamation.
The bank has deposits of 15870 Crs. and loans are 11160 Crs. After this amalgamation net worth of the bank will increased to 43000 Crs. But after amalgamation bank will not be in first 50 no. in world. Central government will open the banking sector to foreign banks after 2008. Amalgamation process of State Bank of Patiala, State Bank of Indore, State Bank of Hyderabad will be at last stages. After this amalgamation State Bank can compete with foreign banks.
After this process loans will increased by 45% but income per capita increases so the net worth also increases. ICICI is the biggest competitor of SBI but ICICI is very small as compared to foreign banks.
Before 1991 government banks has a monopoly in banking sector so they were not giving preference to customer satisfaction. Their was re laxness in banking sector so GOI introduces open policy. Lot of private sector banks are coming through this policy. All these will increases the quality of service from government sector banks.
Now all the banking sector is at another stage of mergers and amalgamation. Competition will increase the process of amalgamation and mergers.
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