State Bank of India Commercial and International Bank Limited (SBICI Bank) Branches start operating as SBI Branches from July 29, 2011
29 Jul 2011
All branches of State Bank of India Commercial and International Bank Limited have started functioning as branches of State Bank of India from July 29, 2011.
Customers, including depositors, of State Bank of India Commercial and International Bank Limited are able to operate their accounts as customers of State Bank of India.
The change came in the wake of the Government of India issuing the notification for Acquisition of State Bank of India Commercial and International Bank Limited by State Bank of India in terms of section 35(2) of the State Bank of India Act, 1955. The Order of Acquisition is effective on July 29, 2011.
SBICI Bank Ltd. is a wholly owned subsidiary of SBI, which was set up in 1994 after taking over the Indian operations of the erstwhile Bank of Credit & Commerce International Ltd. (BCCI), which went into liquidation in 1991.
SBICI Bank Ltd. has only two branches, both in Mumbai. Its performance over the period of its existence has not been consistent. It has not paid any dividend since inception and its net worth stood at only Rs.128.74 crore as on 31st March, 2010 on a capital base of Rs.100 crore.
As on 31st March, 2010, the Bank had a total business (deposits + advances) of less than Rs. 700 crore. The Return on Assets of the Bank was 0.49% as on that date. In terms of RBI guidelines for ownership in private sector banks, the Bank's capital is to be raised to Rs. 300 crore. The existing business model of the Bank and the returns generated by it over the years do not justify additional capital infusion.
The proposed merger would help in eliminating the cost involved in maintaining the administrative structure of SBICI as both the branches of SBICI would be easily absorbed in the operations of the main Bank. Clients of SBI Commercial & International Bank Ltd. who will have access to the bigger network of State Bank of India.
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