The merger of five bank associates with State Bank of India has lot of benefits, which will be experienced by both bank as well as the customers. In the borrowing scheme, bank plans to offer lower interest rates on the things like home, car and personal loans to its various customers which are migrating from five different banks to the one parent bank that is State Bank of India.
The Chairman of State Bank of India, Arundhati Bhattacharya says, “As a result of the mereger the borrowers can expect to get lower rates of interest at the time of renewal or at the the time of origination as SBI’’s rates are obviously the best in the market.”
SBI in the interest market:
SBI is one of the largest mortgage lenders. It is offering at an interest rate of 8.6% for the women borrowers and 8.65 interest rate for all other borrowers on the amount of loans of upto INR75 lakh. The interest rates are as follows:
They range between 8.85% to 9.2% which is approximately 20-25 bps higher.
Arundhati Bhattacharya also added, “ the cost of funds for associates was more than ours that is the reason why their borrower rates were more than ours.”
On Monday, SBI has already reduced its base rate by 15 basis points to 9.1 percent. The new rates have been in effect from 1st April 2017. Whereas SBI has made no changes in its original costs of the lending rates, which were earlier, reduced in the month of January in the year 2017.
Bank on the merger:
It claims to complete the merger process by the month of May and the cost rationalization process will start from the second quarter of the current financial year.
Managing Director of State Bank of India, Rajnish Kumar said, “ the reorganization process will get completed by April 24 them we start the data merger which will happen on the weekend one bank at a time.” He also added, “so within May 27, the entire granular level data merger will be completed. In case of BMB and treasury the granular data merger has already been completed.”