The merger would be done through an order under section 35(2) of the SBI Act 1955, Information and Broadcasting Minister Priya Ranjan Dasmunsi told reporters. Subsequently, the SBS Act, 1950 will be repealed and the SBI (Subsidiary Banks) Act, 1959 will be amended to remove references to SBS wherever it occurs in the Act.
This would be done by introducing the SBI (Subsidiary Banks Amendment) Bill, 2008 in Parliament, he said. The merger would improve efficiency as it would upscale footprint, manpower and other resources.
Under another decision, the Cabinet approved amendments to the SBI (Amendment) Bill, 2006 introduced in the Lok Sabha on December 18, 2006 and SBI (Subsidiary Banks) Act, 1959 following the transfer of the shares of the RBI in the SBI to the Central government.
The amendment would provide clear provision to enable RBI to prescribe ''fit and proper'' criteria for elected directors, replace the provisions of the existing section 19(f) relating to RBI Nominee Director and drop amendments proposed in Clause (i) of sub-section (2) of Section 50.
Also amended would be certain provisions of SBI (Subsidiary Banks) Act 1959 consequent upon the transfer of ownership of the SBI from the RBI to the central government.
The amendments would bring the operations of SBI and its subsidiary banks in tune with the changed scenario and modern business practices.