Sbi Ma

“Pre and Post Merger Financial Performance Analysis of
State Bank of India and its Associate Banks”
Thesis submitted to the University of Mysore in fulfilment of
The requirements for the degree of
DOCTOR OF PHILOSOPHY
IN
MANAGEMENT
Submitted by
BHARATH K A
Research Scholar
Registration Number: WOF – 0637/2016-17
(Dated: 10-05-2016)
Under the Guidance of
Dr. R. SOUNDARA RAJAN

B.E.,CMA., CS., MBA., M.Phil., Ph.D.
Professor, ISBR Research Centre, Bengaluru
Department of Management, University of Mysore

Mysore
2021
DECLARATION
I, Bharath K A hereby declare that the thesis titled “PRE AND POST
MERGER FINANCIAL PERFORMANCE ANALYSIS OF STATE
BANK OF INDIA AND ITS ASSOCIATE BANKS”, is the result of
research work carried out by me under the guidance and supervision of
Dr. R Soundararajan, Professor, Department of Management, ISBR Research
Centre, Electronic City - Phase I, Bangalore - 560100. I further declare that this
thesis or part thereof has not formed the basis for the award of any other degree
of diploma or such other similar title.
BHARATH K A
Registration No: WOF 0637/2016-17
Place : Bangalore
(DATED: 10-05-2016)
Date : Research Scholar
UNIVERSITY OF MYSORE
MYSORE – 570006
Certificate
This is to certify that the thesis entitled “PRE AND POST MERGER
FINANCIAL PERFORMANCE ANALYSIS OF STATE BANK OF INDIA
AND ITSASSOCIATE BANKS”, is a bonafide research work done by
Mr. BHARATH K.A under my supervision, and guidance in fulfilment
of the requirements for the award of the degree of
DOCTOR OF PHILOSOPHY (Ph.D.) in MANAGEMENT from the
University of Mysore.
This is an original work, done as per the regulations of the University

of Mysore, and the content of this thesis is entirely an independent
work on the part of the candidate. The thesis has not formed the
basis for the award of any Degree/Diploma/ Fellowship or any other
similar title of any candidate of any University.
(Dr. R. Soundararajan) (Dr. K. S Anandaram)
Research Guide Director
I
ACKNOWLEDGEMENT
I would like to extend my gratitude to the honourable Vice-Chancellor, Registrar and

all the authorities of University of Mysore for providing me the opportunity to enroll
for Ph.D and allow me to achieve my career vision of doing research.
I would like to extend my deep gratitude to Dr. K S Anandaram, Director, ISBR

Research Centre, Bangalore for his valuable support in completing this thesis. I am
also grateful to Dr. C Manohar, Dr. Manasa Nagahushanam, Dr. Prakash,
Dr. Shankre Gowda whose kind support has been invaluable. I also extend my thanks
to all the professors of the department for their help and guidance.
This thesis has been prepared under the supervision and guidance of
Dr. R Soundararajan, Professor, Department of Management, ISBR Research
Centre, Electronic City - Phase I, Bangalore, without whose guidance and support
this thesis would not have been possible to complete. I am sincerely and deeply
grateful to him for his guidance and support in my research and in completing this
thesis.
I wish to express my thanks to the Librarian and staff of University of Mysore and the
Librarian of Indian Institute of Management, Bangalore for permitting me to use the
library facilities.
I am also grateful to Mr Kamal Kushiyaet, Mr. Thirupathi, Dr. Lakshman,

Mrs. Shobhana, Mrs. Shobha, Mr. Harsha, Mr. Srinivas and institutions who have
helped me and supported me for my research and for the completion of this thesis.
Last but not the least, I am grateful to my friends, family members especially my son
and daughter given their time, support and co-operation for the completion of this
thesis.
I thank almighty for the grace showered on me, to make it happen.
Bharath K A
I
CONTENTS
PARTICULARS PAGE NO.
Declaration I
Guide Certificate II
Acknowledgement III
Executive summary IV
List of Contents V
List of Tables VII
List of and Diagrams XIII
Chapter I: Introduction 1
Chapter II: Review of Literature 34
Chapter III: Research Methodology 57
Chapter IV: Analysis and Interpretation of Data 73
Chapter V: Findings, Suggestions and Conclusions 180
Bibliography 188
Appendix I: Consolidated Bank Financial Statement 199
Annexure I: Survey Instrument 219
Annexure II: Research Publication 221

LIST OF CONTENTS
Chapter Page
Section Title
# #
CHAPTER – 1 INTRODUCTION 1-33
1.1 Introduction to Banking 1-4
1.2 Mergers and Acquisition 4-8
1.3 State Bank of India 9-10
1.4 State Bank of Mysore 11-15
1.5 State Bank of Bikaner & Jaipur 16-17
1.6 State Bank of Hyderabad 18-20
1
1.7 State Bank of Travancore 21-23
1.8 State Bank of Patiala 24-25
1.9 Central Banking Functions 25-27
1.10 SBI and Its Associate Banks Merger 28-29
1.11 Reasons for Merger 29-31
1.12 31-33
Effects of Merger
CHAPTER – 2 REVIEW OF LITERATURE 34-48
2 2.1 Introduction 34-48

2.2 48
Research Gap
CHAPTER – 3 RESEARCH METHODOLOGY 57-72

3.1 Introduction 57-61
3.2 Need/ Importance of the Study 61-62
3.3 Objectives of the Study 62
3.4 Statement of the Problem 63
3
3.5 Scope of the Research 64
3.6 Limitations of Study 65
3.7 Descriptive Research 65
3.8 Research Hypothesis. 65
3.9 Sources of Data 67
3.10 Period of Study 68
3.11 Sampling Design 68
3.12 Tools Used for Analysis 68-70
3.13 Chapter Scheme 71-72
CHAPTER – 4 ANALYSIS AND INTERPRETATION 73-179

Part 1 Overall Financial Performance Evaluation Before and
73-116
After Merger
Part 2 Analysis of The Types of Deposits in SBI and Its
117-128
Associate Banks
4 Part 3 Profit/Loss Position Based Analysis During Pre and
129-168
Post Merger.
Part 4 Analysis of Provisions and Contingencies Before And
169-171
After The Merger
Part 5 Analysis of The Impact of Merger Between SBI and Its
172-179
Associate Banks.
CHAPTER – 5 FINDING, SUGGESTION, AND 180-187

CONCLUSION
5.1 Findings 180-183
5 5.2 Suggestions to State Bank of India 183-185
5.3 Conclusion 186
5.4 Scope for Future Research 187
LIST OF TABLES
Table No Page No.

Description
# #
1.1 Overview of State Bank of India 9
1.2 Overview of State Bank of Mysore 11
1.3 Overview of State Bank of Bikaner & Jaipur 16
1.4 Overview of State Bank of Hyderabad 18
1.5 Overview of State Bank of Travancore 21
1.6 Overview of State Bank of Patiala 24
3.1 Various definitions of research 57
Pre-Merger Versus Post Merger Capital of SB I& It's Associate
4.1 74
Banks (Liabilities)
Pre-Merger Versus Post Merger Reserves And Surplus Of SBI&
4.2 75
Its Associate Banks (Liabilities)
Pre-Merger Versus Post Merger Statutory Reserves of SBI& Its
4.3 76
Associate Banks (Liabilities)
Pre-Merger Versus Post Merger Capital Reserves of SBI& Its
4.4 77
Pre-Merger Versus Post Merger Share Premium of SBI& Its
4.5 79
Pre-Merger Versus Post Merger Revenue And Other Reserves of
4.6 80
SBI & Its Associate Banks (Liabilities)
Pre-Merger Versus Post Merger Borrowings of SBI & Its
4.7 81
Associate (Liabilities)
Pre-Merger Versus Post Merger Borrowings In India of SBI&
4.8 82
Its Associate Banks (Liabilities)
Pre-Merger Versus Post Merger Borrowings Outside India of
4.9 83
SBI& Its Associate Banks (Liabilities)
Pre-Merger Versus Post Merger Other Liabilities & Provisions of
4.10 84
SBI & Its Associate Bank (Liabilities)
Pre-Merger Versus Post Merger Bills Payable of SBI& Its
4.11 86
I
Pre Merger Versus Post Merger Interest Accrued of SBI & Its
.12 87
Pre Merger Versus Post Merger Cash In Hand of SBI& Its
4.13 90
Associate Banks (Assets)
Pre Merger Versus Post Merger Balances With RBI of SBI& Its
4.14 92
Pre Merger Versus Post Merger Balances With Banks Within
4.15 93
India of SBI & Its Associate Banks (Assets)
Pre Merger Versus Post Merger Balances With Banks Outside
1.16 94
India of SBI & Its Associate Banks (Assets)
Pre Merger Versus Post Merger Investments of SBI& Its
4.17 95
Pre Merger Versus Post Merger Investments Within India of SBI
4.18 96
&Its Associate Banks (Assets)
Pre Merger Versus Post Merger Assets of SBI& Its Associate
4.19 97
Banks (Investments In - Government Securities)
Pre Merger Versus Post Merger Investments In Shares of SBI&
4.20 99
Its Associate Banks (Assets)
Pre Merger Versus Post Merger Debentures And Bonds of SBI
4.21 101
&Its Associate Banks (Assets)
Pre Merger Versus Post Merger Other Investment of SBI & Its
4.22 102
Pre Merger Versus Post Merger Advances of SBI& Its
4.23 103
Pre Merger Versus Post Merger Bills Purchased And Discounted
4.24 105
of SBI & Its Associate Banks (Assets)
Pre Merger Versus Post Merger Cash Credits, Overdrafts & Loans
4.25 107
of SBI & Its Associate Banks (Assets)
Pre Merger Versus Post Merger Term Loans of SBI& Its
4.26 108
Pre Merger Versus Post Merger Secured By Tangible Assets of
4.27 109
SBI & Its Associate Banks (Assets)
II
Pre Merger Versus Post Merger Covered By Bank/Govt.
4.28 110
Guarantees of SBI & Its Associate Banks (Assets)
Pre Merger Versus Post Merger Advances In India of SBI& Its
4.29 111
Pre Merger Versus Post Merger Fixed Assets of SBI& Its
4.30 112
4.31 Correlation Analysis Of Fixed Assets And Deprecation 114
Pre Merger Versus Post Merger Other Assets of SBI& Its

4.32 115
Pre Merger Versus Post Merger Interest Accrued of SBI& Its
4.33 116
Pre Merger Versus Post Merger Deposits of SBI& Its Associate
4.34 116
Banks (Liabilities)
Pre Merger Versus Post Merger Demand Deposits of SBI& Its
4.35 118
Correlation Analysis Of Demand Deposit Every Year In SBI & Its
4.36 120
Associate Banks
Pre Merger Versus Post Merger Savings Bank Deposits of SBI
4.37 122
&Its Associate Banks (Liabilities)
4.38 Correlation Analysis Of Saving Bank Deposit 124
Pre Merger Versus Post Merger Term Deposits of SBI& Its

4.39 126
4.40 Correlation Analysis Of Term Deposits 127
Pre Merger Versus Post Merger Earnings of SBI& Its Associate

4.41 129
Banks (Total Interest Earned)
Pre Merger Versus Post Merger Earnings of SBI & Its Associate
4.42 130
Banks (Interest/Discount Earned On Advances/Bills)
4.43 131
Banks (Income On Investments)
4.44 Banks (Interest On Balances With RBI And Other Inter-Bank 132
Funds)
III
4.45 133
Banks (Interest Earned - Others)
4.46 135
Banks (Total Other Income)
4.47 136
Banks (Commission, Exchange And Brokerage)
4.48 137
Banks (Profit (Loss) On Sale Of Investments)
4.49 138
Banks (Profit (Loss) On Exchange Transactions)
4.50 139
Banks (Miscellaneous Income)
Pre Merger Versus Post Merger Expenditures of SBI& Its
4.51 140
Associate Banks (Total Interest Expended)
Pre Merger Versus Post Merger Expenditures of SBI & Its
4.52 141
Associate Banks (Interest On Deposits)
4.53 142
Associate Banks (Interest On RBI/ Inter - Bank Borrowings)
4.54 143
Associate Banks (Interest Expended - Others)
4.55 144
Associate Banks (Total Operating Expenses)
4.56 Descriptive Table Of Total Operating Expenses 145
4.57 t-Test Of Total Operating Expenses 146
4.58 147
Associate Banks (Payments To And Provisions For Employees)
4.59 148
Associate Banks (Rent, Taxes And Lighting)
4.60 149
Associate Banks (Printing And Stationery)
4.61 150
Associate Banks (Advertisement And Publicity)
4.62 Pre Merger Versus Post Merger Expenditures of SBI & Its 151
IV
Associate Banks (Depreciation On Bank's Property)
4.63 152
Associate Banks (Directors' Fees, Allowances And Expenses)
4.64 153
Associate Banks (Auditors' Fees And Expenses)
4.65 154
Associate Banks (Law Charges)
4.66 155
Associate Banks (Postage, Telegrams, Telephones, Etc)
7.67 156
Associate Banks (Repairs And Maintenance)
4.68 158
Associate Banks (Insurance)
4.69 159
Associate Banks (Other Expenditure)
Pre Merger Versus Post Merger Operating Profit of SBI& Its
4.70 160
Associate Banks In India
4.71 Descriptive Statistics On Operating Profit 161
4.72 t-Test On Operating Profit 162
Pre Merger Versus Post Merger Net Profit And Loss of SBI &
4.73 163
Its Associate Banks
4.74 Descriptive Table On Net Profit 164
4.75 t-Test On Net Profit 165
4.76 Correlation Analysis Of Net Profit And Operating Profit 166
4.77 Multiple Regression Table 167
4.78 Descriptive Table Of Net Profit And Loss 168
Pre Merger Versus Post Merger Provisions And Contingencies of

4.79 169
SBI & Its Associate Banks
Pre Merger Versus Post Merger Trend Percentage Analysis On
4.80 171
Provisions And Contingencies
V
Customer satisfaction data during pre- merger versus post- merger
4.81 of SBI and its associate banks 172
Index of customer satisfaction impact during pre- merger versus

4.82 post- merger of SBI and its associate banks 174
Technology impact during pre- merger versus post- merger of

4.83 SBI and its associate banks 176
VI
LIST OF CHARTS AND GRAPHS
Figure No Description Page No.

# #
3.1 The Research Process 59
3.2 The List of Banks In Pre And Post Merger 68
4.1 Trend of Cash In Hand of SBI And Its Associate Banks 91

Trend Analysis of Assets of SBI & Its Associate Banks
4.2 98
During Pre And Post Merger
Trends of Bill Purchased And Discounted During Pre And
4.3 106
Post-Merger
4.4 Trends of Fixed Assets Before And After Merger 113
4.5 Dependent Variable For Net Profit And Loss 168
Trend of Provisions And Contingencies of the SBI And

4.6 170
Associates Banks
1
Executive Summary
Mergers and Acquisitions have been the important weapon of corporate restructuring
in India after the implementation of economic reforms since 1991. In the last two
decades owing to the fast turn, that has taken a position in the business surrounding,
business has to look increased in competition not only from the banking industry
within the region but also from international business giants due to globalization,
liberalization, technological changes and other elements. On 15th June 2016, the
central government approved merger of SBI with its five associated banks. The
purpose of merger was to rationalized resources, reduced costs, improve profit, lower
cost of fund lending to better rate of interest for the public and improve in productivity
and customer services. The researcher selected or chosen the title to “ A study on pre
and post-merger financial performance analysis of SBI and its associate banks”. The
researcher has conducted the literature review on the corporate merger, Service and
banking area of merger and identified the research gap in order to solve the financial
crisis, economic growth, financial performance, risk management, profitability etc.
The study concentration on profitability, financial performance is necessary, this has
provided an opportunity to identify the gap. Therefore, the banking industry has
merged with the other banks to enlarge their capital value and the banks have adapted
various strategies to face financial crisis in the area of asset management, deposit
mobilization, Profit analyses to increased competitive advantages in the value and
performance among the SBI and associated banks. The associated banks financial
performance has not shown significant progress in the area of bank deposit, profit,
contingency and other financial area. The statement of problem is to study pre and
post-merger financial performance.
The objective of study is to focus on the overall financial performance analysis of SBI
and its associated banks during pre and post-merger. The scope of research is SBI and
associated banks analysis of financial performance in the area of deposits, provisions
and contingences, profit and loss, positive and negative impact and overall financial
performance of six banks during pre-merger, one bank after the post-merger from
2012 -13 to 2018-19. The study was done based of descriptive research, collection of
secondary data collected from respective bank annual bank and other sources.
The main hypothesis is to study the pre and post-merger financial performance
analysis of SBI and its associated banks. The significant statistical tools used for
analysis of data are Mean, standard deviation, bivariate correlation, partial correlation,
trend analysis, t-test, ANOVA, etc. The analysis and interpretation of the research
was done objective by objective linked with the hypothesis and respective conclusion
has been arrived. The analysis divided in to five parts as per the objectives of the
project. The analysis began with overall financial performance evolution of schedule
wise Balance sheet and income statement before and after merger. Analysis of
demand deposit, term deposit and saving bank deposits are as the revenue source SBI
and associated banks during pre and post merger, profit and loss consist operating
expenses, operating income, Net profit/loss of based analysis during pre and post
merger, provision and contingency analysis before and after merger and finally the
study also analyze of positive and negative impact of merger between SBI and
associate’s banks during pre and post merger.
The financial performance of the State bank of India is growing and most of the
expenses have reduced as the operations of the bank executed with economies of
scale. The merger was beneficial for enlarging the capital of the state bank of India,
and the associate’s bank's loss is compensated with the help of the merger. Associates
Banks customers are included in the state bank of India and considered on par with the
customers of SBI. The profitability performance of the bank after the merger going
good. Depositors and investors are getting good returns, and the interest rates also
reduced for various loans and advances provided to their customers.
Merger is an advantageous tool for expansion and growth of the state bank of India. It
was helpful for the survival of weak associate banks by merging into a state bank of
India. The researcher took this analysis to find the success level of the merger, and the
progress of the bank in terms of the performances at all directions and levels
comparing the status during pre and post-merger. Net profit of the bank has reduced in
the two years after merger as the bank is in the process of consolidation and settle the
issues of all the associate banks. So the bank has to make efforts to stabilize its
operations by considering the suggestions given by the researcher to increase the share
value of the bank and improve the status of SBI the largest bank in India.
Scope for future research
Before the merger, the associate banks are running under the loss, so compensate this
after the merger of State bank of India & its associate banks financial aspects and the
various strategy has adopted to overcome the financial crisis. This research has made
only the financial perspective based on current situations.
This research has been conducted with limitation of financial perspective only, but in
future it may be carried out on other performance alike, Administration, Human
Resources, Operations management, Customer relationship management, and
Marketing Management, etc.
‘’’’’’’’’’’’’
CHAPTER-1
INTRODUCTION
I
CHAPTER-1 INTRODUCTION
1.1 INTRODUCTION TO BANKING
Bank is a common terminology suggested to as a financial institution or a corporation, which
is authorised by the state or central government to deal with funds, by accepting deposits,
providing loan and investment in securities. The essential roles of banks are economic
development, enlargement of the economy and supply funds for investment. In the modern
era, the banking sector has been undergoing many changes in the condition of the principles
and effects of globalization. These changes have disposed to this sector both structurally and
strategically. With the changing surrounding, many different strategies have been adopted by
this sector to remain efficient and to surge ahead in the global era. One such strategy is
through the progress of consolidation of banks emerged as one of the most profitable
strategies. There are several ways to consolidate the banking industry; the most generally
adopted by banks is a merger Devarajappa, S. (2012)1
The Banking Industry of India has been transformed into a customer-oriented market. It
consists of multiple products, customer groups and different channels of distribution. It is a
well-known truth that an effective and efficient banking system is necessary for the long-run
growth and development of the economy. Therefore, it is required to make a comprehensive
study on the performance of banks in India. A Banking Sector performs three primary
functions in the economy, the operation of the payment system, the mobilization of savings
and the apportionment of saving to investment products. The banking industry has been
turning after the reforms process. The Government has taken this sector as a fundamental
1
Devarajappa, S. (2012). Mergers in Indian Banks: A Study on Mergers of HDFC Bank Ltd
and Centurion Bank of Punjab Ltd. International Journal of Marketing, Financial Services &
Management Research,1(9): 33-42.

priority and this service sector has been changed according to the need of the upcoming era
Barinder Singh (2017)2
The banking system of India began in 1770 and the first Bank was the Indian Bank well
known as the Bank of Hindustan. Later on, some more banks like the Bank of Bombay-1840,
the Bank of Madras-1843 and the Bank of Calcutta-1840 were established under the privilege
of British East India Company. These Banks were merged in 1921 and took a new bank
understood as the Imperial Bank of India. For the growth of banking facilities in the rural
areas, the Imperial Bank of India fractionally nationalized on 1 July 1955 and renamed as the
State Bank of India along with its eight subordinate banks. Later on, the State Bank of
Bikaner and the State Bank of Jaipur incorporated and formed the State Bank of Bikaner and
Jaipur. The Indian banking sector can be divided into two eras, the pre liberalization era and
the post-liberalization era. In pre liberalization, era government of India nationalized 14
Banks on 19 July 1969 and later on, 6 more commercial Banks were nationalized on 15 April
1980 M. Rajamani&Dr.P.R.Ramakrishnan (2015)3.
The banking sector expends a very important position in every economy and is one of the
fastest-growing sectors in India. The competition is intense and unbiased of the challenge
from the multinational players, domestic banks - both public and private are also versed
rigorous in their pursuit of profitable competitive edge by opting for mergers and
2
Barinder Singh (2017) , Financial Analysis of SBI: a study with special reference to Indian
Banking Industry, International Journal of Contemporary Research and Review, Vol. 8, Issue.
7, Page no: ME 20271-20278

3
M. Rajamani&Dr.P.R.Ramakrishnan (2015), A Study on Impact of Merger of Centurian
Bank of Punjab on the Financial Performance of HDFC Bank, IOSR Journal Of Humanities
And Social Science (IOSR-JHSS) Volume 20, Issue 5, Ver. VI (May. 2015), PP 28-31.
2
acquisitions. As a result, Mergers and acquisitions are the usages of the day. Indian
commercial banks are witnessing sweeping changes in the regulatory environment, vast
growth in off-balance sheet risk management financial instruments, the introduction of e-
commerce and online banking, and significant financial business consolidation. All of these
forces have made the Indian banking business highly competitive. Mergers and acquisitions
in banks are very usual all over the globe. These trends were seen in the early 50‟s in the
countries like USA, United Kingdom, Japan, and European countries Dr. (Mrs.)
PrashantaAthma4
The Indian Banking Sector mentioned above is to be the most energetic sector and the
strength of this sector is very influential for the development of the economy of the region.
The banking sector of any economy is said to be the lifeline of that country. It is the most
essential part of the financial system of that economy that operates a vital role in its
functioning. Therefore, mentioned above that the development of an economy is to connect
with the growth of its banking sector. The banking system proves the economic soundness of
that specific country. An excellent banking system utilizes its savings in some gainful as well
as productive sectors and it ensures whether the bank is healthy enough for union in its
objectives towards its investors.
In India, Banking Sector is said to be the strongest sector and its truth is very significant for
the socio-economic growth of the region. In modern times, the banking sector has been
travelling through a lot of turn in the form of regulations and has the influential consequence
of globalization. These innovations or innovate steps, measures. A smooth, stable and
4
Dr. (Mrs.) PrashantaAthma, A. Bhavani, Mergers in Banking Sector in India: An Analysis of
Pre & Post Merger Performance of SBI& HDFC Bank, IOSR Journal of Business and
Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668 PP 07-16
www.iosrjournals.org
3
competent banking sector is very essential to grow the level of the economy in the country.
The stuff such as liberalization and globalization has influenced the banking sector of India in
a very strong aspect. This stuff also affects the performance of the banking sectors.
Liberalization policy produces in the banking sector in India led to consolidated competition,
efficient allocation of resources and begin innovative methods for mobilizing of saving. To
overcome the impact of such modifications several strategies have been adopted by the
banks. In this competitive world, every manager, investor, shareholders of the banks are
concentrating on the financial position of the banks in the hope of gaining profits as well as
for the survival of the banks in the long run. For achieving the purpose, Banks nowadays are
going through various changes in the forms of corporate restructuring, etc.
The Indian Banking Industry shows a signal of improvement in performance and ability after
the global crisis in 2008-09. The Indian Banking Industry is having a far better condition than
it was in the era of crisis. The government has taken different initiatives to encourage the
financial system. The economic recovery direct its strength on the back of different financial
policy initiatives taken by the Reserve Bank of India (Sai and Sultana, 2013)5.
1.2 Mergers and Acquisition
Since the liberalization of the Indian economy in 1991, mergers and acquisitions have been
one of the essential tools for corporate restructuring through combination. With the
globalization of the economy, increased competition from both outside and domestic banks
and strong technology, there has been a fast change in the business surrounding the banking
industry in the last two decades. In method to overcome these challenges competently, most
5
Radha Naga Sai, V. and Syed Tabassum Sultana.(2013). Financial Performance Analysis In
Banking Sector – A Pre & Post Merger Perspective. International Monthly Refereed Journal
of Research In Management & Technology, 2(1): 56-66
4
of the banks have adopted restructuring tactics like a merger, acquisition, takeover, etc. to
gather the advantage of economies of scale, reduced costs, increased geographical insurance,
customer base, etc. The merger has been defined as “a combination of two or more
companies into one, wherein coming together entities destroy their identities. No recent
investment is made through this process. However, an interchange of shares captures place
between the entities complex in such outgrowth” (Nalwaya and Vyas, 2012).In recent past,
many merger and acquisitions took position in the Indian banking sector, of which some were
forced one probable merger of ICICI Bank and Bank of Rajasthan in 2010, merger of HDFC
Bank and Centurion Bank of Punjab in 2008, etc. while some were spontaneous like merger
of Kotak Mahindra Bank and ING Vysya Bank in 2014 HONEY GUPTA (2016)6.
In this scenario, Mergers and Acquisitions is one of the far usage strategies by the banks to
strengthen and maintain their condition in the market. Companies are compared with the
reality that the only big players can survive as there is a cutthroat competition in the market
and the success of the merger depends on how well the two companies integrate themselves
in carrying out day-to-day operations. Banks will get the advantage of economies of scale
through mergers and acquisitions. For enlarging the operations and cutting costs, the Business
Entrepreneur and Banking Sector are using mergers and acquisitions universal as a tactic for
achieving a larger size, increased market share, faster growth, and synergy for becoming
more competitive through economies of scale. The banks must follow the constitutional
procedure of mergers and acquisitions, whichis given by the Reserve Bank of India, SEBI,
Indian Companies Act and Banking Regulation Act 1949. Mergers and acquisitions are not
6
HONEY GUPTA (2016), PRE AND POST MERGER FINANCIAL PERFORMANCE
ANALYSIS OF STATE BANK OF INDIA, ZENITH International Journal of
Multidisciplinary Research, Vol.6 (10), OCTOBER (2016), pp. 1-8.
5
an insufficient conditions process, it engages season to take decisions after examining all the
aspects. Indian Corporate Sector had stringent control before liberalization but the
Government has initiated the Reform after 1991, which resulted in the adaptation of the other
growth and enlargement strategies by the Companies.
Mergers in India in common have expected an increased numerousness in several sectors
particularly after the New Economic Policy in the year 1991, which has, open the doors for
worldwide markets. The Banking Sector in India has testified many Mergers during the years
for different purposes such as Restructuring of Weak Banks; Economies of Scale; Expansion
of Market; Business Consolidation etc. Looking into the relation of Mergers in Banking
Sector in India, initially, they have taken a position as a degree to protect the interests of the
customers of the sickly banks but afterward, a few Mergers also have taken position
voluntarily in the Post Liberalisation Period between several banks for several reasons. The
Indian economy, which is one of the fastest-growing economies in the globe, is poised to
maintain its leading position, in spite of the global financial crisis and economic slowdown.
India has a concert to overcome the global financial turmoil due to sound regulation, prudent
financial supervision, and proactive policies. India's growth is driven primarily by
domesticated consumption and investment and the Indian banking system had no direct
exposure to the US sub-prime charged assets or the failing institutions. During this time, two
mergers have taken the position in Indian Banking Sector one between two-gain making
Public Sector Banks in the lines of consolidation and the other one was between two profit-
making Private Sector Banks for the synergies of merger. In this context, the studies of the
performance of the banks that have merged voluntarily appropriate import Dr. (Mrs.)
PrashantaAthma, A. Bhavani7.
7
Dr. (Mrs.) PrashantaAthma, A. Bhavani, Mergers in Banking Sector in India: An Analysis of
Pre & Post Merger Performance of SBI& HDFC Bank, IOSR Journal of Business and
6
India's growth is driven principally by domestic consumption and investment and the Indian
banking system had no direct exposure to the US sub-prime pledge property or the failed
institutions. During this duration, two mergers have taken a position in Indian Banking Sector
one between two profit-making Public Sector Banks in the lines of combination and the other
one was between two profit-making Private Sector Banks for the synergies of merger. In this
context, the study of the performance of the banks that have incorporated voluntarily presume
importance Dr. (Mrs.) PrashantaAthma, A. Bhavani.
Mergers and Acquisitions have been the chief weapon of corporate restructuring in India after
the implementation of economic reforms since 1991. In the last two decades owing to the fast
turn, that has taken a position in the business surrounding, business has to look increased in
competition from not only the banking industry within the region but also from international
business giants due to globalization, liberalization, technological changes and other elements.
The objectives of M & As is wealth maximization in the word of synergy, strategic
imperatives, capital market expectation, economies of scale, modification, lower earnings
volatility, increased in the domestic market and customer awareness. The consolidation of
business entities, through mergers & acquisitions, is a globe-wide phenomenon. The limit of
consolidation of scheduled mercantile banks seems like one of the most profitable tactics.
Consolidation in the banking sector is very important in the bound of mergers and
acquisitions for the development of the Indian Banking industry. This paper trail to one
public sector bank and one private sector bank based on finance for the years 2004-05 to
2014-15. The study has application productivity and profitability to calculate these banks,
which mirrors operating completion and liquidness of the merger banks. Mergers and
Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668 PP 07-16
7
Acquisitions are the formal business process involving the purchase of one company to
another date bank to the late 19th hundred. Yet mergers and acquisitions remain among
intriguing business paradoxes (Langoford& Brown III, 2004).
According to researchers (Ganghan, 2002) & (Gurbaksh Singh & Sunil Gupta)8,
nowadays, mergers and acquisitions has very familiar growth-oriented strategy especially in
growing countries like India. There are several motives behind Mergers, which stimulate this
activity very quickly; these courses of actions are done to enlarge the business, to get
synergic advantages, to minimize costs, to maintain strong distribution chain, tax planning,
and new product development and to surface speedy competition, etc. The news of Mergers
are very sensitive, it influence the companies involved as well as customers, investors, share
prices and other part of an economy positively or negatively, in form of financial as well as
nonfinancial point of view as follows, M= Mixing, E= Entities, R=Recourses for, G=Growth,
E= Enrichment, R=Renovation (Dr.Veena K.P & Prof. S.N. Patti)9.
8
Gurbaksh Singh & Sunil Gupta, AN IMPACT OF MERGERS AND ACQUISITIONS ON
PRODUCTIVITY AND PROFITABILITY OF CONSOLIDATION BANKING SECTOR
IN INDIA, Abhinav International Monthly Refereed Journal of Research in Management &
Technology, Volume 4, Issue 9 (September, 2015) PP 33-48.
9
Dr.Veena K.P & Prof. S.N. Patti, FINANCIAL PERFORMANCE ANALYSIS OF PRE
AND POST MERGER IN BANKING SECTOR: A STUDY WITH REFERENCE TO ICICI
BANK LTD, International Journal of Management (IJM) Volume 7, Issue 7, November–
December 2016, pp.240–249.
8
1.3 STATE BANK OF INDIA
Table No 1.1Overview of State Bank of India
Former type Public sector
BSE: 500112
Traded as NSE: SBIN
ISIN: NE062A01020
Industry Banking, Financial Service
Imperial Bank of India (1921-1955)

Bank of Calcutta (1806-1921)
Predecessor
Bank of Bombay (1840-1921)
Bank of Madras (1843-1921
Successor State Bank of India
2 June 1806, Bank of Calcutta

15 April 1840, Bank of Bombay
Founded 1 July 1843, Bank of Madras
27 January 1921, Imperial Bank of India
1 July 1955, State Bank of India
owner Government of India (56.92%)
Headquarters Mumbai
Number of locations 22,010
Area served India
Key people Chairman: Rajnish Kumar
Deposits, Personal Banking Schemes, C & I Banking Schemes,

Products
Agri Banking Schemes, SME Banking Schemes
Services Loans, Deposits, Mobile Banking, ATM Services, NRI Services,

Real Time Gross Settlement (RTGS) Transactions, National
9
Electronic Fund Transfer (NEFT), Internet Banking, Debit Card
Net Income 14,488 crore (Us $2.0 billion) (2020)
Total Assets 3,951,394 crore (US $ 550 billion) (2020)
Number of Employees 257,252 (March 2019)
Sources: http://www. Bank.SBI.com
The state bank of India (SBI) is a multinational, public sector banking and financial service
company. It is a government-owned corporation with its headquarters in MUMBAI,
Maharashtra. The bank traces its ancestry to British India, through the imperial bank of India,
to the founding in 1806 of the bank of Calcutta, Making it the eldest commercial bank in the
Indian subcontinent. Bank of Madras merged with the other presidency banks, which in
convert became SBI. The government of India nationalized the Imperial bank of India in
1955, with the reserve bank of India (RBI) taking a 60% stake, and renamed it as SBI. In,
2008, the government took over the stake held by the RBI.
SBI undertook its first-ever merger process of its associate, with the smallest associated state
bank of Saurashtra, which had 460 branches, in August 2008, reducing the number of
associate state banks from seven to six, followed by state bank of Indore in August 2010
under the leadership of the then SBI chairman PratipChaudhuri. The acquisition of
State bank of Indore added 470 branches to SBI’s existing network of branches.
Functions of State Bank of India
The functions of the State Bank of India are largely divided into two main categories. These
are ordinary banking functions and central banking functions. Both these categories are
broadly divided into many subcategories10.
10
https://www.toppr.com/guides/general-awareness/banking/state-bank-of-india-and-its-
associate-banks/.
10
1.4 State Bank of Mysore
Table No 1.2Overview of State Bank of Mysore
Former type Public sector
BSE: 532200
Traded as NSE: MYSOREBANK
ISIN: INE651A01020
Industry Banking, Insurance, Capital Markets and allied industries
Fate Merged with State Bank of India
Predecessor The Bank of Mysore Ltd.
2 October 1913;
Founded
106 years ago as The Bank of Mysore Ltd.
Founder Sir M. Visvesvaraya
Defunct 31 March 2017
Headquarters Bengaluru
Number of locations 1074 branches and 9 extension counters
Area served India
Chairman: Arundhati Bhattacharya

Key people
Managing Director: N.K.Chari
Deposits, Personal Banking Schemes, C & I Banking Schemes,

Products
Agri Banking Schemes, SME Banking Schemes
Loans, Deposits, Mobile Banking, ATM Services, NRI Services,

Services Real Time Gross Settlement (RTGS) Transactions, National
Electronic Fund Transfer (NEFT), Internet Banking, Debit Card
Net Income 276 crores
Total Equity 3988 crores as on 31st March 2014
11
Number of Employees 10226
Parent State Bank of India (90.00% shares)
Source:http://www.statebankofmysore.co.in/index.php/our-profile.html#financial
State Bank of Mysore was a Public Sector bank in India, with headquarters at Bengaluru. It
was one of the five associate banks of State Bank of India. State Bank of Mysore was
established in the year 1913 as The Bank of Mysore Ltd. under the patronage of Maharaja
Krishna Raja Wadiyar IV, at the instance of the banking committee headed by the great
Engineer-Statesman, Bharat Ratna Sir M.Visvesvaraya. During 1953, "Mysore Bank" was
appointed as an agent of Reserve Bank of India to undertake Government business and
treasury operations, and in March 1960, it became a subsidiary of the State Bank of India
under the State Bank of India (subsidiary Banks) Act 1959. Now the bank is an Associate
Bank under State Bank Group and the State Bank of India holds 92.33% of shares. The
Bank's shares are listed in Bengaluru, Chennai, and Mumbai stock exchanges.
This bank had 976 branches and 10627 employees (June 2014) and the Bank has 772
branches (79%) in Karnataka State. The bank had regional offices in Bengaluru, Mysuru,
Mangaluru, Mandya, Hassan, Shivamogga, Davangere, Ballari, Tumakuru, Kolar, Chennai,
Coimbatore, Hyderabad, Mumbai and New Delhi. The bank's turnover in the year 2013-2014
was around US$19 Billion and Profit about US$46 Million.
History
 1913 - The Bank was established as 'Bank of Mysore Ltd.', on 19 May, with an authorised
capital of Rs.20.00 lakhs.
 Commenced its business on 2 October 1913.
 1953 - During the year, the Bank was appointed as an Agent of Reserve Bank of India to
conduct Government business & treasury operations.
12
 1959 - With effect from 10 September, the Bank was constituted as State Bank of Mysore
as a Subsidiary of State Bank of India, under State Bank of India [Subsidiary Banks] Act,
1959 enacted through an Act of Parliament, [Act No. 38 of 1959s].
 1959 -The bank has formulated schemes for financing coffee planters/coffee traders
against coffee curers certificate, financing coffee traders, coffee exporters & coffee curers
who also engage in trading.
The Bank actively participated in all Government sponsored schemes and contributed its
share of financial assistance or the economically weaker sections through DIR, IRDP, Prime
Minister RojgarYojna& SUME schemes.
 The Bank has sponsored two Regional Rural Banks, Cauvery Grameena Bank
&KalpatharuGameenaBank, whichwere merged to form Kaveri-KalpatharuGraminBrank,
headquartered at Mysore with more than 250 branches for growth of agriculture & rural
industries.
 The Bank, as part of State Bank Group has been engaged in financing agriculture and
MSME in 1960 & introduced the concept of need based rather than security oriented
finance & the Entrepreneur scheme under which technically qualified persons financed
the entire requirement up to Rs.2 lacs.
 The Bank has 3 specialised SSI branches to assist the SSI units & proposes to establish 3
more such 551 branches shortly.
 The Bank has correspondent & agency arrangements all over the world & offers spot
services in 18 major approved currencies.
 State Bank of Mysore handles a significant part of day-to-day banking business of both
the Central & State Governments in the State of Karnataka & is a Banker to various
Public Sector Undertakings in various sectors of Economy.
13
 The Bank has been actively participating in welfare banking needs of public through its
community services.
 The Bank is a member of society for worldwide Inter Bank Financial Telecommunication
[SWIFTs], whichwas established to offer cost effective & fast transmission of financial
messages globally. Two branches of bank are presently covered under the scheme and an
additional 15 branches are proposed to be covered under SWIFT shortly.
 1992 - The State Government has also taken up vigorously 'ASHRAYA', a new housing
scheme for weaker sections & 'VISHWA', a new rural & cottage industry scheme. A new
programme called 'AKSHAYA' has also been launched to help the children in primary
education. The Konkan Railway Project & the New Mangalore Port Project are also
progressing satisfactorily.
 1994 - Several important measures have been introduced in the busy season. Credit policy
of November 1993 & slack season credit policy of May 1994, have been announced by
Reserve Bank of India.
 2001 - State Bank of Mysore has opened a foreign exchange cell at its Hirehally
Industrial estate branch in Tumkur district to enable small-scale industrialists to
manage their foreign exchange transactions.
State Bank of Mysore has joined the Real Time Gross Settlement Systems [RTGSs] network
that facilitates inter-bank funds settlement on 22 July.
 2005: 100% computerisation and Core Banking Solutions (CBS) introduced.
 2005: SBM unveils new single window system
 2006: Mr P.P. Pattanayak has assumed charge as Managing Director of State Bank of
Mysore. Mr Pattanayak was earlier Deputy Managing Director [DMDs] & Chief Credit
Officer of State Bank of India, Mumbai.
 2009: The Company splits its share with face value from Rs.100/- to Rs.10/-.
14
 2009: Sri DilipMavinkurve takes charge as Managing Director of the Bank. He was
earlier Chief General Manager of the Bank.
 2012: ShriSharad Sharma takes charge as Managing Director of the bank.
 2013: The Bank celebrated its Centenary year during the period 2 October 2012 to 1
October 2013.
 2017: After 104 years of banking history, State Bank of Mysore was merged with State
Bank of India on 1 April 2017.
15
1.5 State Bank of Bikaner & Jaipur
Table
le No 1.3Overview of State Bank of Bikaner & Jaipur
Former type Public

BSE: 501061
Traded as
NSE: SBBJ
Banking
Industry Insurance
Capital Markets and allied industries
Fate Merged
erged with State Bank of India on 31 March 2017
Founded Jaipur, 1963
Defunct 31-Mar--17
Head Office,
Headquarters TilakMarg,
Jaipur 302 005 India
Arundhati Bhattacharya(Chairman), DibakarMohanty(Managing
Key people
Director)
Products Loans, Savings, Investment vehicles, etc.
Net income ₹ 850.60 Crore (March 2016)
Number of
12,831
employees
Parent State Bank of India
Source: http://www.sbbjbank.com
16
State Bank of Bikaner & Jaipur (SBBJ) was a major Indian bank. It was a subsidiary of
State Bank of India, with which it was merged on 31st March 2017. As of 2015, SBBJ had
1,360 branches, mostly located in the state of Rajasthan, India. Its branch network out of
Rajasthan covered all the major business centres of India. In 1997, the bank entered the
capital market with an Initial Public Offering of 1,360,000 shares at a premium of Rs. 440 per
share. For the year 2015-16, the net profit of the company was Rs. 8.5 billion.
History
State Bank of Bikaner & Jaipur came into existence on 1963 when two banks, namely, State
Bank of Bikaner (established in 1944) and State Bank of Jaipur (established in 1943), were
merged. Both these banks were subsidiaries of the State Bank of India under the State Bank
of India (Subsidiary Bank) Act, 1959.
On 25 April 1966, SBBJ took over Govind Bank (Private) Ltd., Mathura, established on 8
February 1963. In 1984 SBBJ sponsored and established GanganagarKshetriyaGramin Bank
as a Regional Rural Bank. Thereafter, in 1985 SBBJ opened the Bikaner KshetriyaGramin
Bank, the second Regional Rural Bank sponsored by it. The third Regional Rural Bank,
sponsored by SBBJ was MarwarGramin Bank, which covered the districts of Pali, Jalore and
Sirohi. On 12 June 2006, SBBJ merged all three regional rural banks that it sponsored under
the name MGB Gramin Bank, with headquarters in Jodhpur.
The plans to make SBIas one of the top 50 banks in India affected SBBJ very much. In 2016,
the plan to merge SBBJ with its five co-subsidiaries was made, and the Government of India
ratified it on 15 February 2017. It finally merged with SBI on 31 March 2017.
17
1.6 State Bank of Hyderabad
Table No 1.4 Overview of State Bank of Hyderabad
Former type Public Sector

Banking
Industry Insurance
Fate Merged in State Bank of India in 2017
Nizam Mir Osman Ali Khan, Hyderabad State Bank Hyderabad, 8
Founded
August 1941
Defunct 31-Mar--17
Gunfoundry, Abids
Headquarters
Hyderabad India
Area served Pan-India.
India.
Rajnish Kumar (banker) (Chairman), Mani Palvesan (Managing
Key people
Director)
Personal Banking Schemes, Corportate Banking, SME Banking
Products Schemes, FOREX, Mobile Banking, Internet Banking, Credit Cards,
Insurance
Net income Rs. 1317 crores
Owner Government of India
Number of
17,000
employees
Parent State Bank of India (100% owned)
Source: http://www.sbhyd.com
18
State Bank of Hyderabad (SBH) was a nationalized bank in India, with headquarters at
Gunfoundry, Abids, Hyderabad, Telangana. It was one of the five associate banks of State
Bank of India (SBI) and was one of the scheduled banks in India. It was founded in 1941 as
the Hyderabad State Bank. From 1956 until 31 March 2017, it had been an associate bank of
the SBI, the largest such. The State Bank of Hyderabad was merged with SBI on 1 April
2017.
The Bank's head office was situated at Gunfoundry Area, Hyderabad, India. SBH had over
2,000 branches and about 18,000 employees. The Bank's business had crossed Rs. 2.4 trillion
as on 31.12.2015 with a net profit of Rs. 8.12 billion.
SBH Head Office at Gunfoundry
The bank had performed well in the decades before merger, winning several awards for its
banking practices. Mrs.Arundhati Bhattacharya was the Chairman and Shri Mani Palavesan
the Managing Director at the time of merger. It was the chief banker of Telangana State.
The bank was the central bank of the erstwhile Nizam state under the name Hyderabad State
Bank. It was established on 8 August 1941 under the Hyderabad State Bank Act, during the
reign of the last Nizam of Hyderabad, Mir Osman Ali Khan. The bank managed the Osmania
Sicca, the currency of Hyderabad state, which covered the present-day Telangana, some
districts were later known as Hyderabad-Karnataka of Karnataka and Marathwada of
Maharashtra (At the time a number of the princely states had their own currencies). The bank
also carried out commercial banking. The bank opened its first branch at Gunfoundry,
Hyderabad on 5 April 1942. The Imperial Bank of India, which had established a branch in
Hyderabad in 1868 and another in Secunderabad in 1906, provided officers and clerical staff
in the initial stages, and later provided training for new recruits. The first secretary of
Hyderabad State Bank was Muhammad Saleh Akbar Hydari, son of Sir Akbar Hydari. The
19
gun foundry building was designed by Mohammad Fayazuddin, an alumnus of Architectural
Association School of Architecture, London.
After Partition, on 17 September 1948, the Indian Army conducted Operation Polo, which
resulted in the annexation of Hyderabad to India. By 1950, the bank had some 50 branches,
including branches in parts of the then Hyderabad State that would later be transferred to
other states.
In 1953, the bank absorbed, by merger, the Mercantile Bank of Hyderabad, which Raja
PannalalPitti had founded in 1935.[4] (Some accounts give the year of founding as 1946 and
that of merger as 1952). In the same year, the Bank started conducting government and
Treasury business as agent for the Reserve Bank of India.
In 1956, the Reserve Bank of India took over the bank as its first subsidiary and renamed it
State Bank of Hyderabad. That same year it saw the break-up of Hyderabad State.
Aurangabad, Beed, Parbhani, Nanded and Osmanabad merged with Maharashtra state.
Gulbarga, Bidar, Raichur, and parts of Osmanabadwere merged with Karnataka state. The
remaining districts formed part of Andhra Pradesh state, until the formation in 2015-16 of the
state of Telangana. After the trifurcation, the branches of Hyderabad State Bank continued to
conduct government transactions in their new states as well. The Subsidiary Banks Act was
passed in 1959. On 1 October 1959, SBH and the other banks of the princely states became
subsidiaries of SBI.
20
1.7 State Bank of Travancore
Table No 1.5
1.5Overview of State Bank of Travancore
Former type Public

Formerly Travancore Bank Ltd
NSE: SBT
Traded as
BSE: 532191
Banking
Industry Capital Markets and
allied industries
Fate Merged with State Bank of India
Founded Trivandrum, 12 September 1945 (as Travancore Bank Ltd)
Founder ChithiraThirunalBalaramaVarma
Defunct 31-Mar
Mar-17
Headquarters Poojappura, Thiruvananthapuram, India
Number of locations 1,157 Branches, 12 Extension counters and 1,602 ATM Counters
Area served Kerala

Investment Banking, Consumer Banking, Commercial Banking,
Services Retail Banking, Private Banking, Asset Management, Pensions,
Mortgages.
Number of employees 14,069 (2015)

Website statebankoftravancore.com
Source: http://www.statebankoftravancore.com
statebankoftravancore.com
21
State Bank of Travancore (SBT) was a major Indian bank headquartered in
Thiruvananthapuram, Kerala, and was a major associate of State Bank of India. SBT was a
subsidiary of the State Bank Group, but also had private shareholders. It was the premier
bank of Kerala. Overall, as of 31 March 2015 SBT had a network of 1,157 branches and
1,602 ATMs, covering 18 states and 3 union territories. On 15 February 2017, the Union
Cabinet approved a proposal to merge SBT and four other associate banks with SBI. It finally
merged with its parent bank on 31 March 2017.
Foundation
SBT was established in 1945 as the Travancore Bank Ltd., at the initiative of Travancore
DiwanC. P. RamaswamiIyer. Following popular resentment against his dictatorial rule, the
bank never credited its role. Instead, the Bank considered the Maharaja of Travancore
SriChithira ThirunalBalaramaVarma as the founder, though the king had little to do with the
founding. Although the Travancore government put up only 25% of the capital, the bank
undertook government treasury work and foreign exchange business, apart from its general
banking business. Its head office was at Thiruvananthapuram. [2] In 1960, it became a
subsidiary of State Bank of India under the SBI Subsidiary Banks Act, 1959, enacted by the
Parliament of India.,[3] and thus achieved the name 'State Bank of Travancore'.
Merger
On 15 February 2017, the Union Cabinet approved a proposal to merge SBT and four other
associate banks with State Bank of India. [1] It was merged with its parent bank on March 31,
2017.
Acquisitions
Between 1959 and 1965, SBT acquired numerous small, private banks in Kerala. [4]
 1959: SBT acquired the assets and liabilities of Indo-Mercantile Bank, which Sri
PopatlalGoverdhanLalan had helped found in Cochin in 1937.
22
 1961: SBT acquired Travancore Forward Bank (est. 1929), Kottayam Orient Bank (est.
1926), and Bank of New India (est. 1944) after the Reserve Bank of India put the banks
under moratorium.
 1963: SBT acquired VasudevaVilasam Bank (est. 1930).
 1964: SBT acquired Cochin Nayar Bank (est. 1929) and Latin Christian Bank (est. 1928
in Ernakulam), after the Reserve Bank of India put the banks under moratorium. It also
acquired Champakulam Catholic Bank, which had been established in 1929 in Alleppey.
 1965: SBT acquired Bank of Alwaye (est. 1942), and Chaldean Syrian Bank, with
several leading families of Syrian Christian origin founded in 1918. [5]
23
1.8 State Bank of Patiala
Table No 1.6Overview of State Bank of Patiala
Former type Public

BSE: 501061
Traded as
NSE: SBP
Banking
Industry Insurance
Fate Merged in State Bank of India in 2017
Founded Patiala, 1917
Defunct 2017
Head Office,
Headquarters The Mall,
Patiala 147 002 India
Sh. Rajnishkumar (Chairman), Shri. S. A. Ramesh Rangan(Managing
Key people
Director)
Products Loans, Savings, Investment vehicles, etc.
Revenue ₹173,000 crore (US$24 billion) (2013)
Net income ₹11,358.06 crore (US$1.6 billion) (2013)
Total assets ₹116,709.10 crore (US$16 billion) (2013)
Total equity ₹203,417.50 crore (US$29 billion) (2013)
Number of
13178
employees
Website www.sbp.co.in
Source:http://www.sbp.co.in
24
State Bank of Patiala, founded in 1917, was an associate bank of the State Bank Group. At
the time of its merger, State Bank of Patiala had a network of 1445 service outlets, including
1314 branches, in all major cities of India, but most of the branches were located in the
Indian states of Punjab, Haryana, Himachal Pradesh, Rajasthan, Jammu & Kashmir, Uttar
Pradesh, Madhya Pradesh, Delhi, Gujarat and Maharashtra. It merged with State Bank of
India on 1 April 2017.
History
His Highness Bhupinder Singh, Maharaja of Patiala State, founded the Patiala State Bank on
17 November 1917 to foster growth of agriculture, trade and industry. The bank combined
the functions of a commercial bank and those of a central bank for the princely state of
Patiala. The bank had one branch at Chowk Fort, Patiala, Undivided India.
The formation of the Patiala and East Punjab States Union in 1948 led to the bank being
reorganized, being brought under the control of the Reserve Bank of India, and being
renamed Bank of Patiala. On 1 April 1960 Bank of Patiala became a subsidiary of State Bank
of India and was renamed State Bank of Patiala.
Logo and slogan
The logo of the State Bank of Patiala is a blue circle with a small cut in the bottom that
depicts perfection and the small man the common man - being the centre of the bank's
business. The logo came from National Institute of Design(NID), Ahmedabad and it was
inspired by Kankaria Lake, Ahmedabad.
1.9 Central Banking Functions
SBI acts as an agent to the RBI, where there are no branches of RBI were available.
Accordingly, many functions are rendered by the SBI. These are
 Maintaining the currency
 Government’s bank
25
 Bank’s banker
 Acts as a clearinghouse
 Maintaining the currency
RBI is reporting for maintaining its currency. But the offices of RBI are only usable in
massive cities. But the branches of SBI are available everywhere in the region. The network
of SBI employment in rural as well as townies areas.
In such a location, RBI maintains its currency with SBI. The currency is withdrawn from
these branches whenever needed by RBI.
Government’s Bank
SBI caters to the necessity of both the government, central as well as the state. In favour of
the government, it receives the currency and deposits it. It gathers the charges on the
advantage of government’s similar tax collection and other payments. It also grants
accelerates and loans to the government.
Bank’s Bankers
Many mercantile banks have their accounts with SBI. These banks revert to support SBI,
whenever they face fiscal deficiency. It also discounts the bills for these commercial banks.
Due to this performance, SBI is also observing as the banker’s bank but only in a narrow
sense.
26
Acts as a Clearinghouse
In a position where RBI has no branches, SBI acts as a clearinghouse for them. There, it aids
the services of interbank settlements and many other avails. All the banks have accounts with
SBI, so the process of clearing becomes easier for SBI.
General Banking Functions
There are many functions that SBI beyond the above-mentioned services. These services are
rendered by SBI under section 33A. These are:
 It accepts deposits from the people in the form of savings, fixed, current, and recurring
deposit accounts.
 Based on the security of stocks, securities, SBI gives advances and loans to the public.
 SBI gives the facility of drawings, accepting, and buying and selling the bills of
exchange.
 It also issues and circulates the letters of credit.
 SBI also invests in funds or any special kind of security.
 The bank also acts as a trustee, executor, or otherwise, based on the circumstances.
 It is also entrusted with selling and purchasing of either movable or immovable properties
that come in the bank.
 SBI also functions for selling and buying of gold and silver.
 For the general public, it helps in the opening of public provident fund accounts.
 It underwrites any issue related to the securities or the debentures that are authorized.
 It provides the facility of shipping finance as well as various factoring services.
 SBI participates in many leading bank schemes.
27
1.10 SBI AND ITS ASSOCIATE BANKS MERGER
On June 15, 2016, the central government approved the merger of SBI with its five affiliated
banks, namely, State bank of Travancore (SBT), State bank of Mysore (SBM), State Bank of
Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), and State Bank of Patiala (SBP)
in line with required definitive push for consolidation in the banking sector. Finance minister
Mr.ArunJaitley in the Union Budget announced the merger proposal in May 2016. In August
2017, the LokSabha passed the State Banks (Repeal and Amendment) Bill of 2017 to amend
the State Bank of India (SBI) Act of 1955 to remove references related to subsidiary banks.
After the acquisition of subsidiary banks by the SBI, subsidiary banks have ceased to exist.
Therefore, the government found it necessary to repeal the SBI (Subsidiary Banks) Act of
1959 and the State Bank of Hyderabad Act of 1956.
To rationalize resources, reduce costs, improve profits, for lower cost of funds leading to
better rate of interest for the public, and to improve productivity and customer service, the
SBI, with the sanction of the Central government and in consultation with the Reserve Bank
of India (RBI), entered into negotiations with the State Bank of Bikaner and Jaipur, the State
Bank of Mysore, the State Bank of Patiala, the State Bank of Travancore and the State Bank
of Hyderabad for acquiring their business, including assets and liabilities. The schemes
relating to such acquisitions were agreed upon by the Central Board of the SBI and the
respective boards of the subsidiary banks and approved by the RBI. In exercise of the powers
conferred by sub-section (2) of Section 35 of the SBI Act, 1955, the Central government
accorded its sanction.
28
Accordingly (KrishnadasRajagopal)11, the Central government issued the following orders,
sanctioning the scheme of acquisition: (a) the Acquisition of State Bank of Bikaner and
Jaipur Order, 2017; (b) the Acquisition of State Bank of Mysore Order, 2017; (c) the
Acquisition of State Bank of Patiala Order, 2017; (d) the Acquisition of State Bank of
Travancore Order, 2017; and (e) the Acquisition of State Bank of Hyderabad Order, 2017. As
per these, the business of these subsidiary banks is to be carried out by the SBI under the SBI
Act, 1955, with effect from April 1, 2017.
1.11REASONS FOR MERGER
The reasons behind the merger of SBI with its associate banks are listed as follows:
1. Govt. Aid to 1 Merged SBI Group:The SBI and associates banks are one of the largest
Government undertaking banks by the Central Government, whom yearly distribution of
subsidy and contribution towards Bad Debt Retrieval and Share Capital has to be made by the
Indian Government. There is no reason for providing financial aid to so many banks
separately when it can be given to an individual entity. Government aid is for self-assurance
to be fixed to these banks and not just SBI and group but all the banks. So Government aid to
a single SBI merged bank will be much easier in the word of accountability.
2. Bad performance of Banking Sector:The present market position and what will be
tomorrow, most of the Bank’s profitability has fallendown completely from previous years.
Many Bank’s Share prices also decreased drastically because of the anticipation of under-
performance of the Banks. The State Bank groups are no exception to the same and the same
applies to it. SBI is the holding company and the other is its subsidiaries. Therefore, to
display enhanced profitability, the merger is a necessary condition.
11
(KrishnadasRajagopal) , Merging associate banks with the SBI (The Hindu Newspaper),
April 27, 2018, 00:15 IST https://www.thehindu.com/opinion/op-ed/merging-associate-
banks-with-the-SBI/article23686892.ece
29
3. Bad Loans & Inability to Recover:SBI and its group are one of the biggest banking
sector entities who have crores of Bad Loans, which are irrecoverable. Some banks Gross
NPA has touched up to 20%. Due to vast bad loans, an internal corporate restructuring is a
demand for all the associate group banks, otherwise in the upcoming few years; few of them
may even not survive in the market.
4. Corporate Restructuring:Merger of the group banks of SBI is a road to rearrange the
Balance Sheet of the banks. Restructuring is most needed when the other banks are facing
financial crises or there is a chance, the banks cannot meet out its existing liabilities.
Incorporate restructuring, certain liabilities are set off with the revaluation of assets. In this
situation, some banks' liabilities will be adjusted off against the higher re-valued assets of the
other banks to make a kind and attraction Balance Sheet Size of the merged banks.
5. Bigger Bank:By merging all the associate banks, SBI will become the greatest bank as it
will be provided to a larger segment of customers as from its present situation. It can be to
force many services convenient to the customers through a single bank rather than the
upcoming other associated banks. It will have a bigger customer base, and the probability of
earning good profitability through its deposits. It will have the benefit of Synergy with the
associated banks. No high addition cost will be paid since the set-up is almost similar.
6. Better Management:Since it will become one massive merged Bank, it will have only one
administration system rather than having other administration set-ups over the associate
banks. The single administration effective in the business processes will be increased. The
single circular will be issued for all the merged Banks for operational and administrative
supervision. Better internal control and system processes will be carried on with all the
merged banks.
7. Better increased recognition: Those areas where SBI is not having branches but its
associate banks are having, upon the merger being effected, the customer confidence and
30
good report will be created because SBI is having a good report for all its customers but the
other associate banks are not as good as the SBI. In addition, they do not enjoy all those
benefits as SBI. Some sort of change in name from SBI associates to SBI will have a good
market impression and will generate goodwill.
1.12 EFFECTS OF MERGER
As a result of merger SBI will be in the top 50 larger banks of the world. Now SBI has an
asset base of Rs. 37 lakh crores. Presently so many SBI offices along with its associates are
809, which is likely to be decreased to approximately 687 after the merger.
Employees will be transferred mainly to customer interface operations of those branches,
which are likely to be shut down. The mission has been lightened as around 13000 employees
have retired this year and 3600 have taken voluntary retirement. However, the bank will hire
fewer employees in this financial year. Out of the total asset base of SBI, 28 shares of SBI
was given to shareholders of SBBJ who had 10 shares and shareholders of SBM and SBT
having 10 shares will get 22 SBI shares each as only these associates banks are listed with the
stock exchange. Rest of the two banks i.e. SBP and SBH are not enrolled with the stock
exchange Bharat Khurana (2017)12.
The effects of the merger on customers must have a double effect. Most of the retail branches
are working in the manner they used to work. Even the valuation of interest they are offering
on deposits are still the same until the limit of that confine. However, NEFT/RTGS charges
apply to SBI are being charged. Online transactions of associate banks can now be done from
the website of SBI using a previous login name and password.
12
Bharat Khurana (2017), ANALYSIS OF MERGER OF SBI& ITS ASSOCIATES,
Http://www.granthaalayah.com ©International Journal of Research – GRANTHAALAYAH,
Vol.5 (Iss.5): May, 2017
31
13
Many implications would come into effect from the customers of these five banks. The
major 4 impacts of merger for the existing account holders of State Bank of Patiala, State
Bank of Bikaner and Jaipur, State Bank of Raipur, State Bank of Travancore, and State Bank
of Hyderabad.
1. Cheque Books and Post-Dated Cheques Invalid
Cheque Books of the account holders of the merging 5 banks will become invalid. Therefore
any post-dated cheques (other than ECS) that have been issued to a third-party must be
replaced by the new SBI cheques.
Account-holders of State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of
Raipur, State Bank of Travancore, and State Bank of Hyderabad must apply for SBI cheque
books by visiting into the home branch or via net banking, mobile banking, ATM at the
earliest.
2. Electronic Clearing Service - ECS
Hence, there’s no confirmation from SBI for the ECS fund transfer; however, it is expected
that the ECS facility will not be impacted due to this SBI merger as the bank is expected to
sort out Electronic Clearing System at the back-end itself. In the past too, whenever bank
mergers happen, the ECS transactions are tracked with account mapping techniques.
3. Mobile Banking and IFSC Codes
Mobile Banking app and the previous IFSC code have become involved. Therefore, going
forward, account holders need to get the IFSC code as per new SBI bank branch details to do
mobile banking.
13
News18 » Business , Updated:September 30, 2017, 11:39 AM IST
https://www.news18.com/news/business/state-bank-of-india-to-merge-state-bank-of-patiala-
hyderabad-raipur-bikaner-and-jaipur-and-bhartiya-mahila-bank-from-october-1-4-things-you-
must-know-1532633.html
32
4. Fixed Deposits
The terms and conditions for Fixed Deposits have always remained unworried with mergers
in the past. Therefore, with this merger too, it is expected that SBI will let the FDs run their
course as per the previous terms and interest rates of these 5 banks.
33
CHAPTER- 2
REVIEW OF LITERATURE
I
CHAPTER-2 REVIEW OF LITERATURE
2.1 INTRODUCTION
The review of literature helps to understand the concept from past researches conducted by
the researchers in merger and acquisitions of Banks and companies, difficulties and
challenges faced by the researchers in this research area, application of statistical tools on
collected data to derive meaningful information from the research, the finding of previous
researches and the suitable suggestions and conclusions given by various researchers.
1. CMA Jai Bansal and Dr. Gurudatt Kakkar(2018),merger will bring closely a quarter
of all outstanding loans in India’s banking sector to book of accounts. With this footstep
SBI has begin made the list of top 50 world-wide banks. However, there were many
imponderables involved in this great merger, alike, employees upshot related with
redeployment or failure of jobs, on pass, new operation conditions, increased practical
hours, etc.
2. Dr Jyoti Singhal (2017),examined the possessions of merger and acquisition on the
performance of banks pre and post mergers and consolidation. The outcome showed that
it neither improved financial performance nor improved financial efficiency owing to
merger and acquisition. Overhead efficiency ratio has increased after merger of banks in
most of the cases.
3. According to Narayanswamy (2017), the financial analysis is a system to investigate the
yearly report of corporation to afford appropriate information to take some decisions.
Acquiring firm essentials to audit the financial performance of the organization as merger
accept the financial position and wealth of all stakeholders. Since merging is either
having a key impact on financial performance of the purchasing firm in any of the ways,
i.e. positive or negative, the purchaser needs to estimate the target solid in well manner
before going for merger agreement.

4. Ritesh Patel (2017),these paper compare with the before and after fusion assertion of
extended name profitability with consider to chosen Indian banks for the year of 2003-04
to 2013-2014. The fiscal performance is rate on the base of changeable variables. The
meditation found an indirect blowy of fusion on revert on equity, return on property, Net
profit ratio, yield on accelerate and yield on investment. However, variables, namely, the
Earnings per Share, Profit per employee and Business per agent have shown positive bend
and full-grown after the merger. It has been observed that after the merger, the Assets,
Equity, and Investment and adduce of all banks increment, but due to underutilization,
their own yield loss.
5. Daniya et al. (2016), analyze the pre- and post-merger financial performance of 24
Nigerian banks and concludes that the after the merger the financial performance
improved and, as a result, the profitability ratios increased significantly.
6. Dr. Jayashree R Kotnal (2016), the purpose of the present writing is to our research
different reason of merger in Indian banking system. This embraces various aspects of
bank mergers. It also get before and inform-merger fiscal performance of incorporate
banks with the help of financial parameters probably, Gross Profit margin, Net Profit
security, operating Profit margin, Return on Capital Employed, Return on Equity, and
Debt Equity Ratio. Through literature Review it comes to know that most of the toil done
high cheer the stroke of merger and Acquisition on different party. The data of Merger
and Accusations since frugal relaxation are collected for adjust of uncertain fiscal
parameters. Independent T-test usefulness for proof the statistical significance and this
proof is applied for not only proportion analysis but also result of fusion on the
completion of banks. This work being tested on the base of two grounds such as Pre-
merger and Post- merger.
2
7. Dr.Prashanta Athma & A. Bhavani (2016),said, banking sector occupies a very
significant ground in every economization and is one of the fastest development sectors in
India. The reality is strained and independent of the question from the multinational
gamester, man banks - both notorious and secluded are also seen rigorous in their practice
of handy competitor edge by attain or blending with influential opportunities as propitious
today. As a result, Mergers and acquisitions are the custom of the Time. Indian mercantile
banks are testimony sweeping deviate in the regulatory surrounding, excessive
advancement in off equalize sheet risk management fiscal arrange, the preliminary of e-
commerce and online banking, and token bursal trade combination. All of this stuff have
made the Indian banking manufacture highly competitor.
8. Honey Gupta (2016),The aim of the bestow unsubstantial is to take apart the pre and
post-merger fiscal exploit of State Bank of India with the support of variable financial
parameters such as investment ratios, guidance efficiency ratios, debt coverage ratios,
hold ratios, profitability ratios and profit and loss account ratios. Paired sample t-test is
address for the intention of proof the statistical importance of different parameters. The
meditation is supported on secondary data covert eight years annual data of before and
inform merger epoch. The study impart that the State Bank of India (SBI) does not prove
momentous increase in the financial accomplishment in the express merger era. There are
some of the bursal parameters have shown significant improvement during the post
merger while most of the parameters have not shown important growth during the debt
merger end.
9. Jeelanbasha and Arun (2016),deportment a study on “Financial Performance Analysis
of Post-Merger and Acquisition (A Case Study of ICICI Bank)” by second-hand manifold
ratios. The research decide that post-merger profitability has increased from the conquest
3
in operating expenditure and advance in non-interest profit. Hence, bank is focus its
occupation from push full polity to Tory policy of lending.
10. Muhammad Rizwan Ullah, et.al (2016),study has analysed five mergers cases in
banking attention of Pakistan. Different variables like change in vegetation of principal,
deposits, elevate and investment design were taken to investigate sign of ante- and post
mergers. It was concluded that latest mergers and acquisitions contribute benefits to the
banking sector in condition of synergy.
11. Okoye, et.al. (2016), concentrate on ascertaining the fiscal exploit by considering a study
duration of pre 9 years and post 9 years and also the study found that there is non-
significant negative difference in the accomplishment of return on asset in the pre- and
mail merger and acquisition periods. Bank asset ratio shows significant positive variety
between the pre- and the post-merger and acquisition periods. However, the result shows
significant negative difference for capital adequacy ratio between the periods.
12. Patel and Shah (2016),study the pre and post-merger fiscal performance of the Indian
banking business covering duration of 2001 to 2014. They find the impact of merger to be
positive and important for fiscal performance.
13. Tamragundi (2016),this study was centralized on impact of mergers in Indian banking
sector: A comparative study of public and private sector merged banks. This research
examines the impact of mergers on performance of chosen commercial banks in India. At
last the study concludes that, Merger is an important strategy, based on that through
Banks can enlarge their transactions, assist larger customer base, grow profitability,
liquidity and ability but the overall consequence and financial illness of the bank can’t be
solved from mergers of public and private sector banks.
14. Duggal (2015),reveals that the before and after merger, financial growth in Indian pharma
companies during the year from 2000-2006. This research examines that the merger again
4
few benefits as post- merger the profitability proportions have enhanced for one year
only, as a short term period.
15. Gupta (2015),investigate “Merger and Acquisitions in the Indian Banking Sector: A
Study of Selected Banks” has appraise the effects of merger and acquisitions on the
financial action of the chosen banks in India. The study comprehend that during post
merger most of the bursal parameters have shown important growth and there is a positive
percussion of fusion and acquisitions on the fiscal performance of the banks.
16. Gurubaksh Singh and Gupta (2015),in the study “Impact of Merger and Acquisitions
on Productivity and Profitability of Consolidation Banking Sector in India” analyzed the
stroke on the productiveness and profitability of the sampled banks in India and debate
the strength and infirmity of the merged banks in India. The study decide that before and
after fusion the fiscal performance of the banks has increased which secure to the suitable
of selected inn and private sector bank in Indian Banking sector.
17. Lakstutiene et al. (2015),study the post- acquisition performance of 10 corporate firms
based in Lithuania. They covered a period of 2000 to 2010 and find that the merger had a
negative impact on financial performance of the firms. After the merger, the profitability
ratios decreased in the short run.
18. Patel and Patel (2015),in their study have found that the four Indian banks during 2005-
2012 have consolidated, that merger would help to improve the financial performance of
the banks that also a limited extent only.
19. Rani et al. (2015),evaluate the pre and post-merger financial performance of 305
domestic firms using statistical test. The study concludes that before and after the merger
the financial performance has improve and Return on equity, Return on capital employed,
the Net profit margin increased significantly.
5
20. Singh & Gupta (2015),carry out research on, “An Impact of Mergers and Acquisitions
on yield and Profitability of Consolidate Banking Sector in India”. This research
examined the performance, strengthens and weakness of the banks i.e. public and private
sector banks based on the financial ratios from the point of view of pre and post – merger
banks. The collection of data covers financial performance of selected banks from 2004-
05 to 2014- 15. The study concluded that the banks have been positive effects when
distinguished between pre – mergers and post- merger duration
21. Sohini Ghosh, Sraboni Dutta (2015), said that the overall strategic Merger and
Acquisition on the Banking Sector during the time from 2000 to 2010. In this study, they
have intent on 10 Merger and Acquisition converse in the Indian banking sector. The aim
of this study was to measure the change in action levels of the banks.
22. Ahmed and Ahmed (2014),explain the financial act of Pakistani manufacturing
companies duration of 2000-2009. Researcher concludes that the merger happens in
improving the overall performance of the solid. Further, after the merger, there is
significant improvement in profitability and the merger remains positive.
23. Das (2014),studied the pre- and post-merger financial performance of regional rural
banks using a paired t-test. The study finds that the merger has a positive impact on
financial performance and increases profitability significantly.
24. Fakarudin (2014),conducted a research on effects of mergers and acquisitions on income
ability and the potential determinants from Malaysian banks. This paper investigates on
identifying the effects of regulators-order mergers on production effectiveness gains,
revenue efficiency ratio and capital gearing ratio etc. This research also explores the
potential bank-specific and macroeconomics determinants correlative with income ability.
The study sample consisted of banks that were engaged in mergers during 2002-2009.
6
25. Ghosh and Dutta (2014),investigate the performance of 10 telecom enterprises covering
the period from 2000 to 2010. This research discovers that most of the telecom industries
has been growing so the financial performance after the merger is sound.
26. Jayaraman et al. (2014),analyses the pre and post-merger financial performance of
Indian banks covering the duration of 2001 to 2013. They conclude that the merger does
not have any significant percussion on financial performance in the initial era but from
the third year the profitability shows an increasing tendency.
27. Monika (2014),in her paper revision that mergers and acquisitions expressed importance
mingled motives and use behavioural theories to appraise the intellectualism behind
decisions. That proposal would study the context, advance and consequences of mergers
of Indian Banks. The aim of that paper was to charged the overall financial performance
and excellence implications of modern mergers and acquisitions in Indian Banking
system. Since mergers and acquisitions have emerged as a natural process of employment
restructuring throughout the circle and financial restructuring through mergers and
acquisitions calm a big deal of public interest and perhaps represent the most energetic
template of corporate strategy.
28. Parveen Kumari (2014),objective of this research is to assess the impact of Mergers and
Acquisitions in Indian Banking Industry, their condition before and after Mergers &
Acquisitions. The refer to Merger and procurement in Indian banking so deeply has been
to provide the defence and hedging feeble terrace against their failure. The merger
homage in India has yet to charm fire with trader bankers and financial consultants obtain
skills in grinding the banks to absorb unviable banks and put them again on successful
trading operations.
29. Amir, Javid, (2013),the purpose of this study to analyze impact of merger and
acquisitions on working performance and shareholder wealth in Pakistani banking sector.
7
It’s covered data from 2007-2010, with both domestic and foreign banks which are
operating in Pakistan. This research indicates that after the operations and transactions
from the figures that the ratios Financial Performance Analysis of Pre and Post Merger in
Banking Sector in Pakistan.
30. Devarajappa S, (2012),prospect different reason of merger in Indian banking system. It
also compare with pre and post merger fiscal performance of merged banks with the
support of fiscal parameters similar, Gross Profit margin, Net Profit margin, operating
Profit margin, Return on Capital Employed, Return on Equity, and Debt Equity Ratio.
Finally the study discovers that the banks have been really beloved by the favor of
merger.
31. Dobre et al. (2012),explained financial performance of Romanian incorporated firms
covering the duration of 2005-2011. They find that the merger resulted in the growth of
financial performance and, as a result, the profitability ratios increased significantly.
32. Dutta and Dawn (2012),in a paper “Merger of Indian banks after liberalization: An
analysis” analyze the performance of consolidate banks in terms of increase of total
assets, profits, revenue, deposits, and number of employees. The performance of merged
banks is compared taking four years of prior-merger and four years of post-merger. The
study concludes that the post-merger periods were successful and find a major increase in
total assets, profits, revenue, deposits, and in the number of employees of the obtain firms
of the banking industry in India.
33. Goyal (2012),this study focus on merger and acquisition in banking industry especially
study of ICICI bank Ltd. The intention of this study, the growth of ICICI Bank through
mergers, acquisitions, and amalgamation. This research has divided into four parts. The
first part contains introduction and theoretical framework of mergers and acquisition. The
second part examines the historical background of ICICI Bank Ltd. and followed by
8
review of literature. The third part discusses all the mergers, acquisitions, and
amalgamations in detail. Finally, the research paper concludes that a firm must devise a
strategy in three phases such as, pre-merger, acquisition and post-merger etc.
34. Islam et al. (2012),the paper sift the firm, outgrowth and consequences of the merger of
State Bank of Indore with the biggest nationalized bank solid, State Bank of India. Due to
inadequate emphasis on the human funds glance, employee resistance performance as
obstruction to merger of these two banks and tarry the projection. This paper develops a
model which can support the industry realize soft changes without employee resistance.
Primary data was collected through a survey of 58 employees of State Bank of Indore.
The paper explores the outcome of mergers and acquisitions on the morale and
psychology of the employees in the State Bank of Indore.
35. Joshi V and Goyal K.A (2012),intent the advancement of ICICI Bank Ltd. through
mergers, acquisitions and amalgamations. They have revise the historical background of
ICICI bank Ltd. and the variables considered important factors in managing mergers and
acquisitions completely. Finally they concluded that a constant must devise a strategy in
three state, i.e. Pre-merger phase, Acquisition faze and Post merger phase.
36. Saxena C.V and Bhargava (2012),studied the vary in employees morale and skill flat in
an association post merger with the help of questionnaire from the banking sector. They
concluded that employee morale pretends to be an existent element while handling
employees in deviate business scenario and it‘s a psychological soldering of the employee
with the band which self prompt him or her to act particularly.
37. Antony Akhil (2011),analyzed that “financial performance of merged banks in India”
study the impact of the merged banks in India from 1999 to 2011. Between 1999 and
2011, around 18 banks took place in the Indian banking sector. The samples were
acquired from selected six banks, three of them were public sector banks and three were
9
private sector banks. The study findings indicate that there is a significant difference in
the profitability ratios, like (growth of total assets ratio, growth of net profit ratio, return
on assets ratio, return on equity ratio, and net interest margin ratio) of banks in the post-
merger duration.
38. Azeem Ahmed Khan (2011),search several motivations of Merger and Acquisitions in
the Indian banking sector. The rise of the mediation measured that the banks have been
peremptorily inclined by the result of Merger and acquisitions. These rise also intimate
that merged banks could procure ability and profitable through Merger and Acquisitions
and could depart the advantage to the equity share holders‟ in the formality of dividend.
39. Kemal (2011),analyses the pre and post-merger financial performance of Pakistani banks
capital gear the period of 2006 to 2009. The investigate finds that the merger deal desert
to ameliorate the financial performance and results in reduce in the level of profitability.
40. Khan (2011),express that the view of this paper was to search different motivations of
mergers and acquisitions in the Indian banking sector. It was support to get the profit of
better market share and charge ability. The inclined perscrutate the detail of merger and
acquisitions (M&As) with major concentrate on the Indian banking sector in post
liberalization era. The data of mergers and acquisitions since economic liberalization
were collected for a set of inconstant financial parameters. The study appraise
examination supported upon one public and one private sector banks and objectives
analysis supported upon proof the meaning hypothesis pre and post merger banks. The
results of the contemplation depict that the banks have been positively affected and
increased the achievement of banks after the mergers and acquisitions (M&As).
41. Kilic (2011),explore the pre- and post-merger fiscal performance of 10 Turkish banks
using data analysis and predicate positive impact of merger on profitability and revenues.
After the merger, the financial performance improved on annual basis.
10
42. Sanda M.A &Benin P.A (2011),the paper analyzed the degree to which employees
‘compensation with merger-induced organizational deviate a pulse on their
productiveness and the merged-firm production. A sample of 200 employees was choice
as ponder participants and questionnaires were used as the data gathering tool. The results
showed that human resource issues are important aspects of mergers which, if not well
handled, may brunt negatively on hand satisfaction with consequent repercussions on
productivity and the succession of the merger.
43. Sinha Pankaj & Gupta Sushant (2011),deliberate a pre and post analysis of firms and
decide that it had positive result as their profitability, in most of the casing degenerate
liquidity. After the duration of few years of Merger and Acquisitions (M&As) it came to
the appoint that society may have been fitted to hold the synergies rising out of the
merger and Acquisition that have not been clever to manage their liquidity. Study
discloses the compare of pre and post analysis of the firms. It also has shown the positive
consequence on the basis of some fiscal parameter like Earnings before Interest and Tax
(EBIT), Return on shareholder funds, Profit margin, Interest Coverage, Current Ratio and
Cost Efficiency etc.
44. Tiwari (2011),this research was conducted on mergers of banks some spring and
questions us. This research tries to find some important measurement and issues in the
station merger establishment of banking system in India. These problems may change
from financial restructuring to human resource to IT combination etc. This paper main
objective is synergy trading operations and bringing financial puissance. There are some
issues, questions and challenges which need to be addressed in an unavoidable
surrounding of threatening fact of banking mergers in India and also this meditation
recommends Narasingham Committee and BASEL conventions have also propagated the
11
necessity of mergers and consolidations of banking diligence to cause synergic
consequences in India.
45. Aharon David Y et al., (2010),analyzed the post market gurgle operation on Merger and
Acquisitions and imitate by the conquest of pre gull and succeeding, the explosion of
bubble seems to have led to further sensibility by the investors and provide evince which
suggests that during the happy bubble Time investor take more wager. Merger of banks
through consolidation is the important lard of exchange took site in the Indian Banking
sector.
46. Ramakrishnan (2010)explore the percussion of fusion on financial production of Indian
firm’s second-hand data from 1996 to 2002. The meditation came with the issue that the
mergers have better the long-term action of firms.
47. Kumar (2009),in their study tested hypothesis moment whether there is significant
increase in the incorporate performance of Indian manufacturing incorporate firms
sequent the merger occurrence using paired t-test. The study findings indicate that Indian
corporate firms involved in M&A have realize an increase in the liquidity position,
operating performance, profitability, and shorten financial and operating risk. In another
study they explore a sample consist of 20 obtain firms during the era 2007. They
concluded that corporate firms in India look to have complete larger financially after the
merger, as acquire to their performance in the pre-merger conclusion.
48. Kuriakose Sony et al., (2009), analyzed on the appreciation manner and adequacy of
hastily ratio fixed in spontaneous amalgamation in the Indian Banking Sector and
application swap proportion for appraisement of banks, but in most of the conjuncture the
last trade ratio is not justified to their financials.
49. Anand Manoj & Singh Jagandeep (2008),learned the strike of merger announcements
of five banks in the Indian Banking Sector on the shareholder bank. These mergers were
12
the Times Bank merged with the HDFC Bank, the Bank of Madurai with the ICICI Bank,
the ICICI Ltd with the ICICI Bank, the Global Trust Bank merged with the Oriental Bank
of commerce and the Bank of Punjab merged with the centurion Bank. The intimation of
merger of Bank had real and sign impact on shareholder’s welfare. The performance on
both the secure and the target banks, the rise tell that the contract with the European and
the US Banks Merger and Acquisitions except for the facts the worth of shareholder of
bidder Banks have been destroyed in the US firm, the worth value of weighted Capital
Adequacy Ratio of the confederated Bank portfolio as a result of merger.
50. Mantravadi and Reddy (2008), analyzed the pre and post-merger financial action of
Indian firms using paired t-test covering an age from 1991-2003. They find that the
merger remains negative for the financial performance and resulted into diminishing in
various profitability ratios. The mergers that occur among the banking and financial
office firms residuary somewhat beneficial and rise in limbic betterment in profitability.
51. Ramakrishnan (2008),discovers that the merger that occurred in the Indian fiscal sector
from 1996 to 2003 commanded to development in financial performance of organizations
and also underwritten towards curt growth.
52. Demirbag et al. (2007),study the percussion of merger on bursal act of Indian
pharmaceutical firms. The ponder finds that the fusion endure positive from the fiscal
moment of look and follow in lengthen in Return on investment and profitability.
53. Mantravadi Pramod & Reddy A Vidyadhar (2007), appraise that the impact of merger
on the operation performance to obtain firms in separate industries, second-hand pre and
post fiscal ratio to explore the result of merger on firms. They chosen all mergers
complex in public limited and professional society in India between 1991 and 2003, arise
suggested that there were slight deviation in expression of impact as operating
performance after mergers. In separate industries in India expressly banking and revenue
13
business had a slightly positive impact of profitability on pharmaceutical, textiles and
electrical furnishing sector and performance. Some of the industries had an important fail
both in terms of profitability and return on investment and property after merger. Coming
down on the different incentive for Merger and Acquisitions.
54. Mehta Jay & Kakani Ram Kumar (2006),established that there were multiple object
for Merger and Acquisitions in the Indian Banking Sector and still hold to capture the
interest of a research and it plainly for of after the accurate superintendence regulations
had led to a fluctuate of merger and Acquisitions in the Banking laboriousness and nation
many reason for merger in the Indian Banking sector. While a fragmented Indian banking
formation may be very well beneficent to the purchaser because of struggle in banks, but
at the same time not to the horizontal of world-wide Banking Industry, and include that
merger and Acquisition is an obligatory for the quality to related few bulky Banks.
55. Bello (2005),considers that the process of combination has been reason to enhance bank
efficiency through cost decrease and advance in income in the long run. It also lessen
industry risk by ignore weaker banks and acquiring the smaller once by bigger and
stronger banks as well as produce opportunities for more diversification and financial
intervention. It is further set that the exemplar of banking system combination could be
look in two different perspectives, market-driven and state led combination. It is more
broad in the developed countries as a procession of broadening competitiveness with
added comparative benefit thereby omit excess capability more efficiently, while the
latter rising from the destitution to solve problems of financial distress in system to refute
systemic crises as well as restructure inefficient banks.
56. Feroz et al. (2005),establish that financial performance improved significantly after
merger. The fiscal ratios are in developed version after merger.
14
57. Shanmugam and Nair (2004),analyzed the impact of merger on fiscal performance of 54
Malaysian banks. By refer the paired t-test on 1990-2000 data; it is found that
combination has encouraged the fiscal proposition of banks and inference in growth in
profitability ratios.
2.2 Research Gap
1. Few of the research studies says merger happens in improving the overall performance
after merger. This is significant impact in profitability merger remaining positive. So the
gap of the performance is identified only after the merger so there is need to study both
before and after merger evaluation of financial performance of bank.
2. According to previous research study, says analysis of performance after merger there is
significant increase in total asset, profit, revenue, deposit and number employees. So
There is a gap to this study related to revenue in various types of deposit which affects in
the financial performance of pre and post-merger.
3. Some of the study based on private and public sector bank found merger relating in
growth of financial performance increased significantly, but there is a scope to evaluate
SBI and associated bank Net Profit and loss position and during pre and post-merger.
4. Some of the research conducted on corporate bank related to provisions and contagious
shown the effect of performance, but there is scope for further studies related to SBI and
associated bank provisions and contingency before and after merger.
5. The research study found merger has positive impact on financial performance and
significant changes in profitability of private bank, but there is gap to present positive and
negative impact of merger during and pre and post-merger.
15
REFERENCES
 CMA Jai Bansal and Dr. Gurudatt Kakkar (2018) A Research on The Analysis of
Merger of SBI With Its 5 Associate Banks and Bhartiya Mahila Bank, International
Journal of Science Technology and Management, Volume-7, Issue-12, pp: 1-8.
 Dr Jyoti Singhal1 (2017),“Consolidation/ Mergers And Acquisitions Of Banking
Sector For Profitability And Efficiency”, Gian Jyoti e-journal, Volume 7, Issue 3,pp-
39-51
 Narayanaswamy, R. (2017). Financial accounting: a managerial perspective. PHI
Learning Pvt. Ltd.
 Ritesh Patel(2017)Pre & Post-Merger Financial Performance: An Indian Perspective,
Journal of Central Banking Theory and Practice, 2018, 3, pp. 181-200.
 Daniya, A. A., Onotu, S., and Abdulrahaman, Y. (2016). Impact of Merger and
Acquisitions on the Financial Performance of Deposit Money Banks in Nigeria.
Arabian Journal of Business and Management Review, 6(4): 1-5.
 Dr. Jayashree R Kotnal (2016) The economic impact of merger and acquisition on
profitability of SBI, International Journal of Applied Research, volume-2, issue-7,
pp: 810-818
 Dr.Prashanta Athma & A. Bhavani (2016) Mergers in Banking Sector in India: An
Analysis of Pre & Post Merger Performance of SBI& HDFC Bank, IOSR Journal of
Business and Management, PP 07-16.
 Honey Gupta 2016, Pre and Post Merger Financial Performance Analysis of State
Bank of India, ZENITH International Journal of Multidisciplinary Research, Volume-
6, Issue-10, pp. 1-8.
16
 Jeelanbasha, V. & Arun, S.S., 2016, „Financial Performance Analysis of Post-Merger
and Acquisition (A Case Study of ICICI Bank)‟, International Journal of Business
and Administration Research Review 1(1), 209-213.
 Muhammad Rizwan Ullah, Ahsan Ali et.al (2016) “Benefits of Mergers and
Acquisitions in Banking Industry of Pakistan: A Case Study of Five Latest
Transactions”, Journal of Poverty, Investment and Development, An International
Peer-reviewed Journal, Vol.27,pp-25-32
 Okoye Lawrence Uchenna, Modebe, Nwanneka J.et.al (2016) “ Effect of Mergers and
Acquisitions on Banking Sector Performance in Nigeria”, Social Development NG-
Journal of Docial Development, Vol. 5, No. 5, pp-78-86
 Patel, R., and Shah, D. (2016). Mergers and Acquisitions -The Game of Profit and
Loss: A Study of Indian Banking Sector. Researchers World, 7(3):92-100.
 Tamragundi, A.N. (2016). Impact of mergers on Indian banking sector: A
comparative study of public and private sector merged banks. International Journal of
Research in Management, Social Sciences & Technology, ISSN 2320 – 2939, 2320-
2793 (Online).
 Duggal, N. (2015). Post-merger performance of acquiring firms: A case study on
Indian pharmaceutical industry. International Journal of Research in Management and
Business Studies, 2(3): 24-28.
 Gupta, K., 2015, „Mergers and Acquisitions in the Indian Banking Sector: A Study of
Selected Banks‟, International Journal of Advanced Research in Management and
Social Sciences 4(3), 94-107.
 Gurbaksh Singh and Sunil Gupta (2015) An impact of mergers and acquisitions on
productivity and profitability of consolidation banking sector in India, Abhinav
17
International Monthly Refereed Journal of Research in Management & Technology,
Volume-, Issue-9, pp 33-48.
 Lakstutiene, A., Stankeviciene, J., Norvaisiene, R., and Narbutiene, J. (2015). The
Impact of Acquisitions on Corporate Performance Results during the Period of
Economic Slowdown: Case of Lithuania. Procedia-Social and Behavioral Sciences,
213: 455-460.
 Patel, R. J., and Patel, M. K. (2015). Does Merger Be Prolific? A Study of Selected
Indian Banks. International Journal of Applied Financial Management Perspectives, 4
(3): 1965-1970.
 Rani, N., Yadav, S. S., and Jain, P. K. (2015). Financial performance analysis of
mergers and acquisitions: evidence from India. International Journal of Commerce
and Management, 25(4): 402-423.
 Singh, G. & Gupta, S., 2015, An Impact of Mergers and Acquisitions on Productivity
and Profitability of Consolidation Banking Sector in India, Abhinav International
Monthly Refereed Journal of Research in Management & Technology 4(9), 33-48.
 Sohini Ghosh, Sraboni Dutta (2015), “Mergers and Acquisitions in Indian Banking
Sector: Pre-Post Analysis of Performance Parameters” IOSR Journal of Business and
Management (IOSR-JBM), Volume 17, Issue 3.Ver. II (Mar. 2015), PP 01-09
 Ahmed, M., and Ahmed, Z. (2014). Mergers and acquisitions: Effect on financial
performance of manufacturing companies of Pakistan. Middle-East Journal of
Scientific Research, 21(4): 689-699
 Das, S. (2014). Performance Mantra of the Regional Rural Banks: An Evaluation
between the Pre-merger and Post-merger Era. Jindal Journal of Business Research,
3(1-2): 14-28.
18
 Fakarudin, (2014). Effects of Mergers and Acquisitions on Revenue Efficiency and
the Potential Determinants: Evidence from Malaysian Banks, Journal of Social
Science and Humanities, ISSN: 0128-7702, 22 (S): pp. 55 – 76.
 Ghosh, M. S., and Dutta, S. (2014). Mergers and acquisitions: A strategic tool for
restructuring in the Indian telecom sector,Procedia Economics and Finance, Volume-
11: 396-409.
 Jayaraman, A. R., Srinivasan, M. R., and Arunachalam, R. (2014). Impact of merger
and acquisition on the efficiency of Indian banks: a prepost analysis using data
envelopment analysis. International Journal ofFinancial Services Management, 7(1):
1-18.
 Monika (2014), “Mergers and Acquisitions in Indian Banking Sector- A Comparative
Study on Pre-post-Merger”, International Journal of Economic and Management
Strategy, Vol-4, No.-1, pp.no. 1-14.
 Parveen Kumari (2014) “Mergers and Acquisitions in Indian Banking Sector- A
Strategic Approach”, Global Journal of Finance and Management, Vol. 6, No. 3, pp-
217-222.
 Amir, Javid, (2013). Impact of merger and acquisition on operating performance and
shareholder wealth in Pakistan banking sector, Interdisciplinary Journal
Contemporary Research in Business, 5(2361).
 Devarajappa S, IRJC (2012), “Mergers in Indian Banks: A Study on Mergers of
HDFC Bank Ltd and Centurion Bank of Punjab Ltd”, International Journal of
Marketing, Financial Services & Management Research, Vol. 1 Issue 9, September
2012 .
19
 Dobre, F., Brad, L., Ciobanu, R., Turlea, E., and Caloian, F. (2012). Management
performance audit in mergers and acquisitions. ProcediaEconomics and Finance, 3:
309-314.
 Dutta, M.M., and Dawn, S.K. (2012). An Analysis: Mergers and Acquisitions in
Indian Banks after Liberalization: https://www.semanticscholar.org/paper/Mergers-
and Acquisitions in-Indian-Banks-after-An-DuttaDawn/b2f3f24d78da652c74efae448f
55c71 be0ba6f8 a#citing-papers
 Goyal, K.A. (2012). Merger and Acquisition in banking industry: A case study of
ICICI bank Ltd, International Journal of Research in Management, ISSN 2249-5908,
2(2)
 Islam M.D and Sengupta P.P (2012), ―The Behavioural Aspect of Mergers and
Acquisitions: A Case Study from India, Global Journal of Business Research, Vol.6,
No.3, pp. 103-112.
 Joshi V and Goyal K.A (2012), ―Mergers in Banking Industry of India: Some
Emerging Issues, Asian Journal of Business and Management Sciences, Vol.1, No.2,
pp. 157-165.
 Saxena C.R and Bhargava I (2012), ―Employee Morale an Indicator of Success or
Failure of an Organization, Bauddhik, Vol.3, No.2, pp. 16-22.
 Antony Akhil, K. (2011), “Post-Merger Profitability of Selected Banks in India,”
International Journal of Research in Commerce, Economics and Management, Vol. 1,
No. 8, (December), pp. 133-5.
 Azeem Ahmed Khan (2011), “Mergers and Acquisitions in Indian Banking Sector in
Post Liberalisation Regime”, International Journal of Contemporary Business Studies
Vol 2, No: 11 November 2011
20
 Kemal, M. U. (2011). Post-merger profitability: A case of Royal Bank of Scotland
(RBS). International Journal of Business and Social Science, 2(5): pp157-162.
 Khan, AzeemAhmad (2011), “Merger and Acquisitions (M & As) in the Indian
banking sector in post liberalization regime”, International journal of contemporary
business studies, Vol.II, No. XI, November, pp.no. 31-45.
 Kiliç, M. (2011). Cross-border bank acquisitions and banking sector performance: an
empirical study of Turkish banking sector. Procedia- Social and Behavioral Sciences,
24, 946-959.
 Sanda M.A and Benin P.A (2011), ―How is the Firm Dealing with the Merger? A
Study of Employee Satisfaction with the Change Process, Journal of Management
and Strategy, Vol.2, No.2, pp. 28-37.
 Sinha, Pankaj and Gupta, Sushant (2011) Mergers and Acquisitions: A pre-post
analysis for the Indian financial services sector,Munich Personal Repec Archive, pp:1-
37
 Sanjay, Tiwari, (2011). Mergers of banks some issues and challenges us,
International Journal of Multidisciplinary Research, 2231 5780, 1(4).
 Aharon, David & Gavious, Ilanit & Yosef, Rami. (2010). Stock market bubble effects
on mergers and acquisitions. The Quarterly Review of Economics and Finance. 50.
456-470.
 Ramakrishnan, K. (2010). Mergers in Indian industry: performance and impacting
factors. Business Strategy Series, 11(4): 261-268.
 Kumar, R., (2009). "Post-Merger Corporate Performance: an Indian Perspective",
Management Research News 32 (2), pp. 145-157
21
 Kuriakose Sony, Gireesh Kumar GS. (2009) Assessing the Strategic and Financial
Similarities of Merged Banks: Evidence from Voluntary Amalgamations in Indian
Banking Sector, Science & Socity, Volume-8, Issue-1, pp:49-62.
 Anand Manoj and Singh Jagandeep (2008) ‘Impact of Merger Announcements on
Shareholders’ Wealth Evidence from Indian Private Sector’, Volume 33 Pages: 360-
383.
 Mantravadi, D. P., and Reddy, A. V. (December, 2008). Post-merger performance of
acquiring firms from different industries in India. International Research Journal of
Finance and Economics, 22: 192-204.
 Ramakrishnan, K. (2008). Long-term post-merger performance of firms in India.
Vikalpa, 33(2): 47-64.
 Demirbag, M., Ng, C. K., and Tatoglu, E. (2007). Performance of mergers and
acquisitions in the pharmaceutical industry: a comparative perspective. Multinational
Business Review, 15(2): 41-62.
 Mantravadi Pramod, Reddy A Vidyadhar. Relative Size In Mergers And Operating
Performance: Indian Experience, Economic and Political Weekly, 2007.
 Mehta, Jay and Ramkumar Kakani (2006), ‘Motives for Mergers and Acquisitions
inIndian Banking Sector- A Note on Opportunities and Imperatives’, Working Paper,
S.P.Jain Centre of Management, Singapore, 1-11.
 Bello YA (2005) Banking system consolidation in Nigeria and some regional
experiences: Challenges and prospects. Bullion Publication of the Central Bank of
Nigeria.
 Feroz, E. H., Kim, S., and Raab, R. (2005). Performance measurement in corporate
governance: do mergers improve managerial performance in the post-merger period?.
Review of Accounting and Finance, 4(3): 86-100.
22
 Shanmugam, B., and Nair, M. (2004). Mergers and acquisitions of banks in Malaysia.
Managerial Finance, 30(4): 1-18.
23
CHAPTER-3
Research Methodology
Chapter 3: Research Methodology
3.1 Introduction
Research methodology is most important in the research, the process is used to collect
information and data for the purpose of pre and post-merger financial performance analysis
of state bank of India and it’s associate banks. The methodology may include publication
research, interviews, surveys and other research techniques, and could include both present
and historical information. This chapter covers research design, research objectives, research
hypothesis, sampling and size, data collection, literature review and different data analysis
carried out on the data collected.
Table No 3.1 shows various definitions of research
Author Definitions
Research is a systematic and objective analysis and recording of

controlled observations that may lead to the development of
John .W. Best
generalizations, principles, theories and concepts, resulting in
prediction for seeing and possibly ultimate control of events.
“Research is a process of steps used to collect and analyze

information to increase our understanding of a topic or issue”. It
Creswell
consists of three steps: Pose a question, collect data to answer the
question, and present an answer to the question.
Research is a systematic, formal, rigorous and precise process

Waltz and Bausell employed to gain solutions to problems or to discover and interpret
new facts and relationships.
Research comprises defining and redefining problems, formulating
Clifford Woody hypothesis or suggested solutions; collecting, organizing and
evaluating data; making deductions and reaching conclusions;
D. Slesinger and M. “the manipulation of things, concepts or symbols for the purpose of
2
Stephenson generalizing to extend, correct or verify knowledge, whether that
knowledge aids in construction of theory or in the practice of an art.
Research methodology is a systematic technique to find suitable solution along with strong
suggestions for solving the research problem. Researcher may understand that research is a
science of study solve social issues to and do research in a scientific manner. Researcher has
to study the various aspects that are commonly adopted by the researcher in studying his
research area along with the reason behind him. Research methodology is not only knowing
the research methods, it also knows that this research method is relevant or not on your
research area. Apart from this the researcher need to know to develop the hypothesis, and
how to calculate the various statistical analysis: such as mean, mode, median, standard
deviation, T-Test, ANOVA and Correlations etc… All this means that it is necessary for the
researcher to design his research methodology.
In the social science research, two types of classification are made with the consideration of
the different thoughts of the researchers such as; Descriptive vs. Analytical: Descriptive
research includes describe the problem and fact-finding enquiries of different kinds. The
intention of the description of research is description of the state of affairs, as it exists at
present. The methods of research utilized in descriptive research are survey methods of all
kinds, including comparative and correlation methods.Here the researcher analyse the impact
of pre and post financial performance analysis of state bank of India and it’s associate banks.
Research process
Research process consists of series of actions or steps necessary to effectively carry out
research and the desired sequencing of these steps. The research process adopted for the
study involves seven steps.
3
Figure No- 3.1 shows the research process
Source: C.R. Kothari, Research Methodology
4
Define Research Problem
Defining the research problem is first footstep of researcher’s process. Identifying the
research problem supports immediate social issues or causes in and around the society.
Initially the problem may be established in a broad common way and then the ambiguities, if
any, relating to the problem may be determined. Then, the feasibility of a particular solution
has to be pondered before a practical devising of the proposition can be set up. The
formulization of a general topic into a specifying research problem, thus form the first step in
a scientific enquiry.
Review of Literature
Now that the problem has been identified, the researcher must learn more about the topic
under investigation. To do this, the researcher must review the literature related to the
research problem. This step provides foundational knowledge about the problem area. The
review of literature also educates the researcher about what studies have been conducted in
the past, how these studies were conducted, and the conclusions in the problem area.
Formulate Hypothesis
Based on existing the research the researcher has identified the research gap. Once the
research gap had been founded researcher need to formulate the hypothesis based on the
objectives.
Research Design
Research design is a blue print of research work. In this research, design helps where to
collect the information, sample methodology, how to frame the hypothesis and what kind of
tool to be used for collecting the data etc…
Data collection
Data collection is a process of collecting information from all the relevant sources to find
answers to the research problem, test the hypothesis and evaluate the outcome. Data
5
collection methods can be divided into two categories: secondary methods of data collection
and primary methods of data collection.
Analyse the Data
After the data has been collected, the researcher turns to the task of analyses. The analysis of
data requires a number of closely related operations such as establishment of categories and
the application of these categories to raw data through editing, coding, tabulation and then
drawing statistical inferences. The unwieldy data should necessarily be condensed into a few
manageable groups and tables for further analysis.
Interpretation and Report preparation
The researcher had no hypothesis to start with researcher might seek to explain his findings
on the basis of some theory. It is known as interpretation. This research process finally ends
with report preparation from introduction, literature review, research methodology, findings,
suggestions and conclusions. At the end of the report, appendices should be enlisted in
respect to all technical data. Bibliography, i.e., list of books, journals, reports, etc., consulted,
should also be given to the end. Index should also be given specially in a published research
report.
3.2. NEED/ IMPORTANCE OF THE STUDY
As merger and acquisition has become essential for banking industry to service for the
globalization privatization liberalization era. It is necessary for banking sector particularly
scheduled government bank to have good financial strength to compete with private bank in
the market. This is study titled “ A study on pre and post-merger financial performance
analysis of SBI and its associate banks” helps to understand and find the answer for research
gap questions which helps improving the performance of the bank by identifying the grey
area. The study is focused on evaluation of financial performance before and after merger
6
SBI and it is the associated and verifying the different types of deposit in SBI and associate
which contribute to the growth of bank and gives better service to the customer.
The study also focuses on the profitability position of bank which tells about its SWOT
analysis of merger and acquisition of bank particularly selected public sector bank. The
practical problems of provision and contagious, operating expenses and challenges to make
day to day expenses which has increased dramatically over the year. The study helps to
understand SBI and associate banks overall impact of merger and acquisition of the
government owned company, where it motivate in service providing and strengthening the
Indian banking system. So, it helps in coordination of bank to provide better services to the
customer by rendering services. The outcome of this research should facilitate better
understanding of non-financial and qualitative management of bank such as asset utilization
market penetrating strategies, deposit mobilization, task management and other facilities
which could be used to increase competitive advantages in the value and performance among
others after merger and acquisition.
3.3. OBJECTIVES OF THE STUDY
1. To understand and evaluate the financial performance before and after merger of State
Bank of India and it associate banks.
2. To analyze the status of major types of deposits in State Bank of India and its associate
banks between pre and post-merger.
3. To analyze the profit/loss position of the banks during pre and post-merger period.
4. To examine the provisions and contingencies before and after the merger.
5. To Analyse the customers satisfaction level after the merger.
6. To present the impact of merger between State Bank of India and its associate banks.
7
3.4. STATEMENT OF THE PROBLEM
The main motto of the merger is to strengthen financial aspects of bank. The study title pre
and post-merger financial performance analysis of SBI and its associated bank is majorly
concern on merger and acquisition effects of SBI and its associated bank. The problem
statement is to find the effect on financial position of the bank. There have been a greater
need of studies in the area of merger acquisition, but most of them focused on banking sector.
Further few studies focused to analyses the merger and acquisition activity in the service
sector along with the pre and post-merger and moreover banking has emerging with other
banks due to enlarged capital value of government of India adopting the various strategies to
face financial crisis in various banks, hence there is need of study of the present time of SBI
and Associated bank after merger and acquisition, which have significant consequence on the
performance and profitability in the State Bank of India. Therefore decision making and
policy interest extremely essential factor to identify the impact of these merger bank
efficiency level and there time based behaviour on provisions and contingency to understand
how the banking sector handling this situation. The performance policy and strategy could be
brought to light to the management of the bank. So it is necessary step should be taken to
face the issues and challenges relating to the subject of the bank. The practical challenges and
impact of merger and acquisition activity could also be highlighted.
8
3.5. SCOPE OF THE RESEARCH
Business combination are strategic approach, the associated banks have been merged with
mother bank for enlarging their financial and other aspects. The scope of the research is
limited to the analysis of financial performance of pre and post merger of SBI and its
associate banks. The analysis is conducted primarily on the basis of the schedules of SBI and
its associate banks considering the performances for 5 years prior to the merger in the year
2012-13 to 2016-17 and 2 years after the post merger in the year 2017-18 to 2018-19. The
findings and suggestions are provided with the help of trend analysis and hypothesis testing
conducted to prove the presuppositions framed with reference to the financial performance on
the basis of the schedules wise Balance sheet and income statement analysis, major types of
deposits, profit position, provisions and contingencies, impact of merger between State Bank
of India and its associate banks during pre and post-merger .
9
3.6. LIMITATIONS OF STUDY
The SBI merger with five of its associate banks happened in the year 2017, so it is only two
years have passed after the merger as on 2019. The findings are given with the help analysis
made based on 2 years performance of merged entity. The researcher analyzed only financial
aspects of the merger, which is a limiting factor to provide the overall picture of the post-
merger status with the impact on the operation of the bank.
3.7. DESCRIPTIVE RESEARCH
Descriptive research includes fact-finding inquiries of different kinds. The major purpose of
descriptive research is the description of the state of affairs as it exists at present. Descriptive
research can be either quantitative or qualitative. Descriptive research involves gathering data
that describe events and then organizes, tabulates, depicts, and describes the data collection.
3.8. RESEARCH HYPOTHESIS
In order to analyse the objectives of the project the researcher use some statistical tools such
as Chi square test, t-test, F-test, have been developed by statisticians for the purpose. The
hypothesis may be tested through the use of one or more of such tests, depending upon the
nature and object of research inquiry. Hypothesis testing will result in either accepting the
hypothesis or in rejecting it. This hypothesis testing helps to the researcher to find the
relationship or cause and effect of the variables. The hypothesis are listed below:
Hypothesis 1
H0: There is no significant relationship between increasing fixed assets and increasing
depreciation rate during the period of the study.
H1: There is a significant relationship between increasing fixed assets and increasing
depreciation rate during the period of the study.
10
Hypothesis 2
H0: There is no significant relationship of increasing demand deposit every year in SBI& Its
associate banks between pre and post-merger.
H1: There is a significant relationship of increasing demand deposit every year in SBI& Its
Hypothesis 3
H0: There is no significant relationship of increasing saving bank deposit every year in SBI&
its associate banks between pre and post-merger.
H1: There is a significant relationship of increasing saving bank deposit every year in SBI&
its associate banks between pre and post-merger.
Hypothesis 4
H0: There is no significant relationship of increasing Term Deposit every year in SBI& Its
H1: There is a significant relationship of increasing Term Deposit every year in SBI& its
Hypothesis 5
H0: There is no significant difference between the operating expenses of pre and post-merger.
H1: There is a significant difference between the operating expenses of pre and post-merger.
Hypothesis 6
H0: There is no significant difference between the operating profit of pre and post-merger.
H1: There is a significant difference between the operating profit of pre and post-merger.
Hypothesis 7
H0: There is no significant difference between the net profit of pre and post-merger.
H1: There is a significant difference between the net profit of pre and post-merger.
11
Hypothesis 8
H0: There is no significant relationship between the net profit and operating profit of pre and
post-merger.
H1: There is a significant relationship between the net profit and operating profit of pre and
post-merger.
Hypothesis 9
H0: There is no significant relationship between the net profit and Investments, Borrowings,
Reserve and Surplus.
H1: There is a significant relationship between the net profit and Investments, Borrowings,
Reserve and Surplus.
Hypothesis 10
H0: There is no significant difference between the monthly Income and Customer satisfaction
level in SBI after the merger.
H1: There is a significant difference between the monthly Income and Customer satisfaction
level in SBI after the merger
3.9. SOURCES OF DATA
Primary Data:
The primary data has collected from 120 respondents who had bank accounting in associate
banks. The structured questionnaire has used to collect the customer’s opinion about the
merger of their bank accounts, and their satisfaction level.
Secondary Data:
The data used in the research consist of only secondary data. The data has been gathered from
official website of RBI, published annual reports, SBI websites, annual books, journals,
published and unpublished thesis, money control website, Newspaper and magazine etc.
12
3.10. PERIOD OF STUDY
The study has been covered for a time period of 7 years as five years before the date of
merging and 2 years after the date of merging, it including the year of merger of SBI and its
associate’s banks in India.
3.11. SAMPLING DESIGN
On the basis of gathered data from the various sources of SBI and its associate banks before 5
years merger and after 2 years merger from the date of merger on 1st April 2017.
Accordingly, the sample of the study will consist of SBI and its five associate banks. The list
of such banks is given below:
Figure No- 3.2: shows the list of banks in Pre and Post Merger
STATE BANK OF INDIA

Pre-merger of SBI and Its
Post Merger of SBI

Associate Banks
1. State Bank of Bikaner & Jaipur

State Bank of India
2. State Bank of Mysore
3. State Bank of Travancore
4. State Bank of Hyderabad
5. State Bank of Patiala
3.12. TOOLS USED FOR ANALYSIS
The data were collected from each category of respondents, after that the data were
processed. For analysing the data, the researcher used SPSS software version 22 and
advanced excel. The Researcher used various statistical tools that are as follows:
Parametric and non-parametric tests:
Selecting the right statistical tools to compare measurements is little complicated between the
group of tests parametric and non-parametric. Many statistical tests are based on the samples
distribution.
13
Mean
The arithmetic mean, more commonly known as the average is the sum of a list of numbers
divided by the number of items on the list. The mean is useful in determining the overall
trend of a data set or providing a rapid snapshot of research data. Another advantage of the
mean is that it is very easy and quick to calculate.
Standard Deviation
The standard deviation often represented with the Greek letter sigma is the measure of a
spread of data around the mean. A high standard deviation signifies that data is spread more
widely from the mean, where a low standard deviation signals that more data align with the
mean. In a portfolio of data analysis methods, the standard deviation is useful for quickly
determining dispersion of data points.
Independent sample t test
Independent sample t test is one of the parametric tests. It compares the means of two
independent groups in order to determine whether there is statistical evidence associates are
significantly different. In this research independent sample t test have been applied to
understand the significant difference between Pre-merger and post-merger of operating and
net profit of State Bank of India.
Bivariate correlation
The bivariate Pearson Correlation measures the strength and direction of linear relationships
between pairs of continuous variables. The values of -1 denote perfectly negative linear
relationship, 0 denotes no relationship and the +1 represents perfectly positive linear
relationship.
14
Partial correlation
Partial correlation measures the strength of a relationship between two variables, while
controlling the effect of one or more other variables. Depreciation rate of fixed assets is
controlling the fixed assets depreciation value in pre and post-merger of State bank of India.
Trend analysis
Trend analysis is an essential item in the financial statements over multiple time periods, to
see how the company is performing. Typical trend lines are for income, the gross margin, net
profits, cash, accounts receivable, and debt.
One-sample t-test
The one-sample t-test compares the mean of a single sample to a predetermined value to
determine if the sample mean is significantly greater or lesser than that value.
ANOVA Test
Analysis of Variance (ANOVA) test is an essential for Variance analysis of impact on
technological factors during pre and post-mergerof State bank of India and its associate
banks.
15
3.13. CHAPTER SCHEME
The research work is classified into various chapters describing the research topic elaborately
with a detailed explanation of all the aspects. Each chapter focus on certain aspects of the
outcome of the research related to research Objectives.
Chapter 1: INTRODUCTION
This Chapter represents the research perspectives towards the research outline. It emphasizes
the introduction of the study, merger and acquisition, State bank of India its associates banks,
functions of merger, reasons and benefits of state banks of India & its associates banks, and
consequences of merger.
Chapter 2: LITERATURE REVIEW
The state bank of India is one of the largest financial service in India, and it has ranked 216th
in the Fortune Global 500rankings of the world's biggest corporations for the year 2018. This
chapter helps to know the existing research at the national and international level, it covers
review related to merger and acquisition, state bank of India and its associate banks etc.
Literature review helps identifying the research gap to achieve new heights in the area of
research.
Chapter 3: RESEARCH METHODOLOGY
The chapter includes the research methodology includes source of data, statement of the
problem, and need of the study, significance of the study, objective of the study the tools used
to test the hypotheses.
Chapter 4: ANALYSIS & INTERPRETATION
This chapter deals with the financial performance of state bank of India, its associates banks
income statement and balance sheet from 2012-13 to 2016-17 in pre-merger and 2017- 18 to
2018-19 in post-merger.
Analysis is divided into 5 parts as per the objectives of the project.
16
Part 1: Overall Financial performance evaluation before and after merger
Part 2: Analysis of the types of deposits in SBI and its associate banks
Part 3: Profit/loss position based analysis during pre and post-merger.
Part 4:Examine provisions and contingencies before and after the merger.
Part 5: Analysis of the impact of merger between SBI and its associate banks.
Chapter 5: FINDING, SUGGESTION, AND CONCLUSION
The findings and suggestions are provided based on data analysis of the financial
performance in pre and post-merger duration of state bank of India & its associate banks. The
conclusion of the thesis given to the authorities of state bank of India, shareholders, creditors,
debenture holders, Reserve of bank of India and common public who were having the bank
accounts in the SBI and all the associate banks merged during the period of study.
17
CHAPTER-4
Analysis and Interpretation
of Data
1
CHAPTER-4
ANALYSIS AND INTERPRETATION
The Data was collected from six banks in pre-merger duration and one bank from post-merger
duration. The collected banks data were analysed using SPSS (Statistical Package for Social
Science) version 22 and advanced Excel. The aim of the analysis was to find out the
profitability and financial performance of State Bank of India Pre and post-merger.
The financial statement report was collected from State bank of India and its associated
banks from the period of 2012-13 to 2016-17 in pre-merger and 2017-18 to 2018-19 in post-
merger duration. The study has been conducted on the basis of secondary data collected from
the respective banks. The analysis aimed to find out the impacts of financial performance of
State bank of India after the merger.
Analysis is divided into 5 parts as per the objectives of the project.
Part 3: Profit/Loss position based analysis during pre and post merger.
Part 4:Provisions and contingencies before and after the merger.
Part 5: Analysis of the impact of merger between SBI and its associate banks.
2
LIABILITIES
Table No: 4.1 - Schedule No 1: PRE MERGER VERSUS POST MERGER CAPITAL OF SBI& IT'S ASSOCIATE BANKS
(LIABILITIES)
Capital is an initial investment of the business organization. Capital is the difference between a bank's assets and its liabilities, and it represents
the net worth of the bank or its equity value to investors. Each bank has to invest some money in generating income.
(Rs.in Crores)
Pre &
Banks
S.No Post 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name
Merger
1 SBBJ 70.00 6.00 70.00 5.37 70.00 4.92 70.00 4.25 70.00 1.76 NIL NIL NIL NIL
2 SBH 20.75 1.78 20.75 1.59 20.75 1.46 20.75 1.26 20.75 0.52 NIL NIL NIL NIL
3 SBI Pre- 684.03 58.65 746.57 57.29 746.57 52.42 776.28 47.11 797.35 20.06 NIL NIL NIL NIL
Merger
4 SBM 46.80 4.01 48.01 3.68 48.01 3.37 48.01 2.91 48.01 1.21 NIL NIL NIL NIL
5 SBP 294.75 25.27 367.85 28.23 479.51 33.67 661.53 40.15 2967.61 74.66 NIL NIL NIL NIL
6 SBT 50.00 4.29 50.00 3.84 59.25 4.16 71.10 4.32 71.10 1.79 NIL NIL NIL NIL
Post-
7 SBI NIL NIL NIL NIL NIL 892.45 100.00 892.45 100.00
Merger
Total 1166.33 100.00 1303.19 100.00 1424.10 100.00 1647.68 100.00 3974.82 100.00 892.45 100.00 892.45 100.00
Source: Bank Annual Report
The table no 4.1 reveals the share capital of SBI and associated banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-2019 (post-
merger). In the pre-merger state bank of India and its associate banks, share capital were moderately increasing from 2012-13 to 2015-16, but
3
suddenly in the year, 2016-17 share capital was increased more than 200% in state bank and its associates' banks. But after the merger, the share
capital has reduced due to compensating on associate bank losses, but SBI is going to concentrate the capital value.
Table No: 4.2 - Schedule No 2: PRE MERGER VERSUS POST MERGER RESERVES AND SURPLUS OF SBI& ITS ASSOCIATE
BANKS (LIABILITIES)
Reserve means a provision for a specific purpose. There are so many unknown expenditures that occur in the current year or the future. To meet
such types of expenses the business firm has to make the reserves. The surplus is the credit balance of the profit and loss account after providing
for dividends, bonuses, provision for taxation and general reserves, etc. Surplus profit may also be earmarked for special purposes such as
reserves for obsolescence of plant and machinery. (Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI Pre-Merger 98199.65 79.10 117535.68 80.53 127691.65 79.78 143498.16 80.20 187488.71 86.70 NIL NIL NIL NIL
7 SBI Post-Merger NIL NIL NIL NIL NIL 218236.10 100.00 220021.3 100
Total 124152.61 100.00 145959.23 100.00 160052.35 100.00 178919.09 100.00 216245.00 100.00 218236.10 100.00 220021.3 100
The table no 4.2 indicates the total reserve and surplus of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-
2019 (post-merger). In the pre-merger state bank of India and its associate banks, reserve and surplus were maintaining reasonably. But after the
4
merger, the reserve and surplus maintaining the percentage was less compared with pre-merger duration, it indicates the state bank of India has
decided to maintain a small percentage of reserve and surplus because the possibility of losses and unexpected expenses may be reduced in
Merger
Table No: 4.3 - Schedule No 2.1: PRE MERGER VERSUS POST MERGER STATUTORY RESERVES OF SBI& ITS ASSOCIATE
BANKS (LIABILITIES)
Statutory reserves are bank assets of a banking company and are legally required to maintain on its balance sheet concerning the un matured
obligations of the company. Statutory reserves are a type of actuarial reserve. This reserve is created in terms of Section 17 under the banking
regulation act 1949.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
7 SBI Post-Merger NIL NIL NIL NIL NIL 65336.98 100.00 65595,65 100.0
Total 49353.83 100.00 53475.36 100.00 58409.24 100.00 62155.09 100.00 65327.30 100.00 65336.98 100.00 65595,65 100.0
5
The table no 4.3 indicates the statutory reserve of SBI and associate banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-2019
(post-merger). In the pre-merger state bank of India and its associate banks, the statutory reserve was maintaining reasonably. But after the
merger, the reserve maintaining the percentage was less compared with pre-merger duration, it indicates that the state bank of India has decided
to maintain a small percentage of the statutory reserve because the possibility of losses and unexpected expenses may be reduced in Merger.
Table No: 4.4 - Schedule No 2.2:PRE MERGER VERSUS POST MERGER CAPITAL RESERVES OF SBI& ITS ASSOCIATE
BANKS (LIABILITIES)
The capital reserve is a reserve that is created from a surplus of profit & loss account and profit on the sale of the investment. This reserve will
help to meet future capital expenditure or to compensate for capital losses. This reserve will not distribute to as a dividend or any other form to
the shareholders. (Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
7 SBI NIL NIL NIL NIL NIL 9391.66 100.0 9770,65 100.0
Merger
Total 2065.81 100.00 2365.71 100.00 2589.89 100.00 3137.94 100.00 5079.55 100.00 9391.66 100.0 9770,65 100.0
6
The table no 4.4 indicates the capital reserve of SBI and associate banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-2019 (post-
merger). In the pre-merger state bank of India and its associate banks, the capital reserve was maintaining reasonably. But after the merger, the
capital reserve was increased in the year 2017-18 around 85% of the percentage was compared with pre-merger duration, and 2018-19 again
increased by 4% based on the previous year, hence the state bank of India has maintained a huge percentage of capital reserve because the
capital expenditure or capital loss may happen in future.
Table No: 4.5 - Schedule No 2.3: PRE MERGER VERSUS POST MERGER SHARE PREMIUM OF SBI& ITS ASSOCIATE BANKS
(LIABILITIES)
A company issues the shares more than face value and that value is considered as a premium. Premium means an extra amount paid by the
shareholders while comparing to the actual price of the share. A shareholder pay premium to the company when the share value of the company
is good and there must be more demand for shares. The shareholders based on the number of shares pay this share premium.
7
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
7 SBI
Merger
NIL NIL NIL NIL NIL 79124.22 100.00 79115.47 100.0
Total 33637.38 100.00 44033.58 100.00 45049.67 100.00 54454.62 100.00 61962.30 100.00 79124.22 100.00 79115.47 100.00
The table no 4.5 shows the share premium of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-2019 (post-
merger). The share premium has increased every year in pre and also it has increased in the year 2017-18 but the premium has little reduced in
the 2nd year of post-merger. Investors are little thinking about investing SBI after the merger but, it seems to be SBI issuing the shares more than
face value and it is having demand in the share market.
8
Table No: 4.6 - Schedule No 2.4: PRE MERGER VERSUS POST MERGER REVENUE AND OTHER RESERVES OF SBI& ITS
ASSOCIATE BANKS (LIABILITIES)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
7 SBI
Merger
NIL NIL NIL NIL NIL 79461.81 100.00 80765.42 100
Total 39042.32 100.00 46044.70 100.00 53906.78 100.00 59082.43 100.00 90201.08 100.00 79461.81 100.00 80765.42 100
The table no 4.6 shows the revenue and other reserves (includes Foreign currency translation reserve, revenues, revaluation reserve, and profit
and loss account) from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-2019 (post-merger). It was consistently increasing every year
from 2012-2013 to 2015-2016, but suddenly in the year 2016-17 revenue and other reserve have increased 50% of the last year's total reserve
value. After the merger, it has slightly reduced but again in the year 2018-19, the revenue and other reserves are increased.
9
Table No: 4.7 - Schedule No 4: PRE MERGER VERSUS POST MERGER BORROWINGS OF SBI & ITS ASSOCIATE BANKS
(LIABILITIES)
Receiving something of value in exchange for an obligation to pay back something of usually greater value at a particular time in the future.
Banks are getting some funds from inside India and across India. Banks can borrow from the financial institution, other banks, reserve bank of
India and other financial institution.
(Rs.in Crores)
Banks Pre & Post

c 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
Merger
Total 201915.13 100.00 220852.20 100.00 241507.78 100.00 352108.97 100.00 334621.58 100.00 362142.07 100.00 403017.12 100.00
The table no 4.7 reveals the total borrowings of SBI and associated banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-
merger). In the pre-merger state bank of India and its associate banks, borrowings were reasonably increasing from 2012-13 to 2014-15, but
suddenly in the year 2015-16 it has increased about 46% in comparison with last year, and 2016-17 borrowings had little reduced in state bank
10
and its associates' banks. After the merger, the borrowings have little increased, it indicates that because of the merger the SBI has increased
their liabilities but it may reduce in the future.
Table No: 4.8 - Schedule No 4.1: PRE MERGER VERSUS POST MERGER BORROWINGS IN INDIA OF SBI& ITS ASSOCIATE
BANKS (LIABILITIES)
Banks can borrowings any loans or money inside India. State banks and its associate banks lend the money from the Reserve bank of India, other
commercial banks, financial institutions like SEBI, IFC or any other agencies, which is located in India.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
Merger
Total 89188.13 100.00 94672.30 100.00 77322.71 100.00 170593.81 100.00 133849.89 100.00 142643.52 100.00 169841.93 100.00
The table no 4.8 reveals the borrowings in India by SBI and associates banks from 2012-13 to 2016-17 to 2018-19 (pre-merger) and 2017-18 to
2018-19 (post-merger). In the pre-merger state bank of India and its associate banks, borrowing in India was on fluctuating from 2012-13 to
11
2014-15, but suddenly in the year 2015-16 it has increased about 120% in comparison with last year, and 2016-17 borrowings in India have
reduced around 20% by state bank and its associates' banks. After the merger, the borrowings have little increased, it indicates that because of
the merger the SBI has increased their liabilities but it may be reduce in the future.
Table No: 4.9 - Schedule No 4.2: PRE MERGER VERSUS POST MERGER BORROWINGS OUTSIDE INDIA OF SBI& ITS
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI 107326.91 95.21 122692.85 97.24 159753.82 97.30 177748.82 97.93 200058.05 99.64 NIL NIL NIL NIL
Pre-Merger
4 SBM 325.71 0.29 569.19 0.45 625.00 0.38 662.55 0.37 Nil 0.00 NIL NIL NIL NIL
5 SBP 1250.00 1.11 808.85 0.64 968.75 0.59 1159.46 0.64 Nil 0.00 NIL NIL NIL NIL
6 SBT 1644.84 1.46 599.15 0.47 Nil 0.00 Nil 0.00 Nil 0.00 NIL NIL NIL NIL
Post-
Merger
Total 112727.00 100.00 126179.90 100.00 164185.07 100.00 181515.17 100.00 200771.69 100.00 219498.55 100.00 233175.18 100.00
12
The table no 4.9 reveals the borrowings outside India by SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-
19 (post-merger). In the pre and post-merger state bank of India and its associate banks was borrowing continuously, so it indicates that the SBI
is borrowing loans and money across the globe.
Table No: 4.10 - Schedule No 5: PRE MERGER VERSUS POST MERGER OTHER LIABILITIES & PROVISIONS OF SBI& ITS
ASSOCIATE BANK (LIABILITIES) (Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
Merger
Total 119989.89 100.00 122019.10 100.00 163916.53 100.00 188428.63 100.00 183732.84 100.00 167138.08 100.00 145597.30 100.00
13
The table no 4.10 reveals the status of other liabilities and provisions of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and
2017-18 to 2018-19 (post-merger). In the pre-merger state bank of India and its associate banks, other liabilities and provisions were reasonably
increasing from 2012-13 to 2015-16, but in the year, 2016-17 other liabilities and provisions were decreased to 2% in state bank and its
associates' banks. After the merger, the other liabilities and provisions have been reduced consistently, it indicates that merger is good thinking
to reduced liabilities and provisions.
14
Table No 4.11 - Schedule No 5.1:PRE MERGER VERSUS POST MERGER BILLS PAYABLE OF SBI& ITS ASSOCIATE BANKS
(LIABILITIES)
A bill payable is a document that shows the amount billed for goods or services received on credit (meaning not paid at the time that the goods
or services were received). The supplier of the goods or services is denoted as the supplier or vendor. Hence, a bill payable is also known as an
unpaid vendor invoice. (Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI
Pre-Merger
19686.48 80.84 19165.70 81.57 20184.70 81.17 18438.46 79.18 26666.84 86.09 NIL NIL NIL NIL
Post-
7 SBI
Merger
Total 24353.07 100.00 23497.44 100.00 24868.66 100.00 23286.11 100.00 30975.21 100.00 26617.75 100.00 23875.66 100.00
The table no 4.11 reveal that bills payable of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-
merger). In the pre-merger state bank of India and its associate banks, bills payable was kept on fluctuating from 2012-13 to 2015-16, but
15
suddenly in the year, 2016-17 bills payable was increased around 33% in state banks and its associates' banks. In post-merger, the bills payable
has reduced, so the liability has been reduced because of the merger.
Table No 4.12 - Schedule No 5.2: PRE MERGER VERSUS POST MERGER INTEREST ACCRUED OFSBI& ITS ASSOCIATE
BANKS (LIABILITIES)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
Merger
Total 17900.05 100.00 20714.99 100.00 25697.65 100.00 30040.98 100.00 15914.60 100.00 16279.63 100.00 14479.87 100.00
16
The table no 4.12 reveal that interest accrued of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-
merger). In the pre-merger state bank of India and its associate banks, paying interest from 2012-13 to 2015-16, but suddenly in the year, 2016-
17 bills payable was reduced around 47% in state bank and its associates' banks. After the merger, the interest accrued has increased in 2017-18,
but 2018-19 reduce because of all customers and loans accumulated.
17
ASSETS
Table No 4.13 - Schedule No 6: PRE MERGER VERSUS POST MERGER CASH IN HAND OF SBI& ITS ASSOCIATE BANKS
(ASSETS)
Cash in hand denotes that the total amount of any accessible cash. It is held by the banks in the form of notes and coins or which are held in the
form of on-demand deposits such as current accounts and savings accounts, or any kind of investments that you can convert to cash in 90 days or
less are typically included when calculating your cash on hand.Cash at bank and in hand is part of current assets in the balance sheet.
18
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
1 SBBJ 353 2.65 432.77 2.97 558.05 3.21 502.55 2.90 679.21 4.64 NIL NIL NIL NIL
2 SBH 510.19 3.83 626.03 4.30 588 3.38 519.18 2.99 672.53 4.60 NIL NIL NIL NIL
Pre-Merger
Post-
Merger
Total 13313.57 100 14557.3 100 17408.77 100 17348.2 100 14630.59 100 15472.42 100.00 18777.94 100.00
19
Pre-merger versus Post merger trend of cash in hand of SBI and its associate banks
20000 18777.94
18000 17408.77 17348.2 y = 551.6x + 13723
15472.42R² = 0.371
16000 14557.3 14630.59
14000 13313.57
12000
10000
8000
6000
4000
2000
0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
Figure 4.1 shows trend of cash in hand of SBI and its associate banks
The above table no 4.13 and figure no 4.1 reveal that cash in hand from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-merger)
of State bank of India and its Associates' banks. In the pre-merger case state bank of India and its associate banks were keep on increasing the
cash but in the 2016-17 cash was reduced from the state bank of India. After the post-merger State Bank of India has increased the cash in hand
value. Hence, it is concluded that after the merger the bank was decided to maintain more liquid cash. It is concluded that the merger is a very
good condition for SBI and its associates' banks.
20
Table No: 4.14 - Schedule No 6.1: PRE MERGER VERSUS POST MERGER BALANCES WITH RBI OF SBI& ITS ASSOCIATE
BANKS (ASSETS)
SBI and its associates' banks deposit through CRR and SLR (Cash reserve ratio & statutory liquidity ratio) as Total of Cash in hand and
Balances with RBI divided by Total deposits. Every bank needs to maintain some money in RBI, it may be in the form of Indianor foreign
currency. (Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
Merger
Total 76004.59 100.00 99245.54 100.00 126527.28 100.00 142637.43 100.00 146064.12 100.00 134924.76 100.00 158154.47 100.00
The table no 4.14 shows that Balance with RBI from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2019 (post-merger) of State bank of India
and its associates' banks. In the pre-merger case state bank of India and its associate banks were properly maintaining the balance with RBI.
After the post-merger State Bank of India has reduced the balance in RBI, it may because of the merger of all banks but in the year 2018-19
Balance has increased by SBI in Reserve bank of India.
21
Table No: 4.15 - Schedule No 7.1: PRE MERGER VERSUS POST MERGER BALANCES WITH BANKS WITHIN INDIA OF SBI&
ITS ASSOCIATE BANKS (ASSETS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI
Pre-Merger
3666.65 80.76 14208.58 98.44 193.76 77.61 151.94 80.60 190.86 0.45 NIL NIL NIL NIL
4 SBM 21.83 0.48 18.48 0.13 10.59 4.24 -0.18 -0.10 18864.33 44.94 NIL NIL NIL NIL
Post-
7 SBI
Merger
Total 4540.28 100.00 14433.99 100.00 249.66 100.00 188.50 100.00 41978.13 100.00 48.60 100.00 87.02 100.00
The table no 4.15 shows that Balance with banks in India from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-merger) of State
bank of India and its- associates' banks. In the pre-merger case state bank of India and its associate banks were properly maintaining the balance
with RBI. After the post-merger State Bank of India has reduced the balance in banks, it may because of the merger of all banks but in the year
2018-19 Balance has increased by SBI in Reserve bank of India.
22
Table No: 4.16 - Schedule No 7.2: PRE MERGER VERSUS POST MERGER BALANCES WITH BANKS OUTSIDE INDIA OF SBI&
(Rs.in Crores)
Bank
Pre & Post
S.No s 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Merger
Name
Pre-Merger
5 SBP 0.00 134.20 1.00 74.72 0.32 206.44 0.75 49.76 0.18 NIL NIL NIL NIL
Post-
7 SBI
Merger
Total 30609.18 100.00 13401.44 100.00 23667.65 100.00 27499.34 100.00 28092.91 100.00 29754.53 100.00 22537.22 100.00
The table no 4.16 shows that Balance with banks outside India from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-merger) of
State bank of India and its associates' banks. In the pre-merger case state bank of India and its associate banks were properly maintaining the
balance with outside India. After the post-merger State Bank of India has reduced the balance outside India.
23
Table No: 4.17 - Schedule No 8: PRE MERGER VERSUS POST MERGERINVESTMENTS OF SBI& ITS ASSOCIATE BANKS
(ASSETS)
The investment is an asset for generating income or increase the value. SBI and its associate banks invest their investment into different kinds of
securities such as; shares, Bonds & debentures, Government securities, Investment in India and outside India.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
380
2 SBH 33967.98 7.18 34266.96 6.56 36491.15 6.00 5.24 43628.77 4.63 NIL NIL NIL NIL
07.60
Post-
7 SBI
Merger
Total 472948.10 100.00 522547.28 100.00 607729.50 100.00 725996.37 100.00 941885.56 100.00 1060986.72 100.00 967021.95 100.00
The table no 4.17 reveal that investment of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-
merger). In the pre-merger case state bank of India and its associate banks investing more investments every year, after the merger State Bank of
India has increased the investments. This investment includes (Investment in India & outside in India, Investment in Government securities and
24
share market etc…) Hence it is concluded that banks have been consistently increasing the investment before and after the merger but the
investment has decreased in the year 2018-19.
Table No: 4.18 - Schedule No 8.1:PRE MERGER VERSUS POST MERGER INVESTMENTS WITHIN INDIA OF SBI& ITS
ASSOCIATE BANKS (ASSETS)
State bank of India and its associate's banks had invested their investment in India. They invest money and maximize investment value. The
investment should be made in Indian companies or the company controlled by India which is registered under companies act. The investment
may be in the name of securities such as; shares, bonds, debentures, deposits, etc…
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
Merger
Total 452063.51 100.00 498287.64 100.00 577372.48 100.00 686559.65 100.00 900154.83 100.00 1014836.01 100.00 915706.77 100.00
25
The table no 4.18 reveal that investment in India invested by SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to
2018-19 (post-merger). In the pre-merger case state bank of India and its associate banks investing their investment in India every year, after the
merger State Bank of India has increased the investments but suddenly the 2nd year of the merger it has reduced. Hence it is concluded that after
the merger the bank increased the investment so the merger does not affect the investment.
Table No: 4.19 - Schedule No 8.2: PRE MERGER VERSUS POST MERGER ASSETS OF SBI& ITS ASSOCIATE BANKS
(INVESTMENTS IN - GOVERNMENT SECURITIES)
Government securities mean securities issued by the central and state government or both with an assurance of repayment after the maturity
period along with interest. These securities should be considered as low risk because it is issuing by the government. The government issuing
the securities to raise funds to meet day-to-day government operations and other government activity.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
Merger
Total 376550.43 100.00 417653.23 100.00 489074.37 100.00 593165.72 100.00 737002.89 100.00 848395.84 100.00 761883.12 100.00
26
Pre-merger versus Post- merger trend of assets of SBI & its associate banks
900000 848395.84
y = 80908x + 27975
800000 737002.89 761883.12
700000
593165.72
600000
489074.37
500000
417653.23
376550.43
400000
300000
200000
100000
0
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Figure 4.2.shows the trend analysis of assets of SBI& its associate banks during pre and post merger
The table no 4.19 and figure no 4.2 reveal that investment in government securities by SBI and associates banks from 2012-13 to 2016-17 (pre-
merger) and 2017-18 to 2018-19 (post-merger). Every year the banks had been investing more funds in the form of government securities. While
investing in this kind of Investments, the investment will be safe and banks can avoid the tax value. Moreover, the merger does not affect this
investment.
27
Table No: 4.20 - Schedule No 8.3: PRE MERGER VERSUS POST MERGER INVESTMENTS IN SHARES OF SBI& ITS
Shares are a small part of share capital, Banks Investing in shares of companies and corporations or share markets. The purpose of investing in
shares to get equal distribution in any profits or the form of dividends. Shares are divided into two types such as; equity shares and
preference shares.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI
Pre-Merger
3865.82 82.33 3009.16 81.63 4336.49 86.39 3743.81 78.61 5445.70 75.78 NIL NIL NIL NIL
Post-
Merger
Total 4695.68 100.00 3686.51 100.00 5019.68 100.00 4762.43 100.00 7185.96 100.00 10516.69 100.00 9878.74 100.00
28
The table no 4.20 reveal that investment in shares by SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19
(post-merger). In the pre-merger state bank of India and its associate banks, investment was kept on fluctuating from 2012-13 to 2016-17 due to
instability of the share market.
29
Table No: 4.21 - Schedule No 8.4: PRE MERGER VERSUS POST MERGER DEBENTURES AND BONDS OF SBI& ITS
A bond and debenture is a debt instrument issued by State banks and its associate's banks. Bonds are generally issued by the government, the
agencies of government or by large corporations whereas debentures are issued by public companies to raise money from the market.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 20365.54 100.00 29081.00 100.00 34846.70 100.00 44453.24 100.00 62503.61 100.00 77962.93 100.00 84948.37 100.00
The table no 4.21 reveal that investment in bonds and debentures by SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-
18 to 2018-19 (post-merger). In the pre-merger state bank of India and its associate banks, debentures and bonds were increased every year.
30
Table No: 4.22 - Schedule No 8.5: PRE MERGER VERSUS POST MERGEROTHER INVESTMENT OF SBI& ITS ASSOCIATE
BANKS (ASSETS)
A well-diversified investment portfolio contains a mix of shares, bonds, short-term cash investments, debentures and savings accounts. Other
investment means residual investment like gold, silver, commercial paper, derivatives, and real estate, etc.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 44919.01 100.00 41631.23 100.00 40750.91 100.00 35309.58 100.00 82014.47 100.00 72882.57 100.00 53388.54 100.00
The table no 4.22 reveal that other kind of investment by SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-
19 (post-merger). In the pre-merger state bank of India and its associate banks, investment was decreasing from 2012-13 to 2015-16, but
31
suddenly in the year 2016-17, they invested more than double. In post-merger, again the investments keep on reducing because the bank is
utilizing the investments to compensate the existing loss.
Table No: 4.23 - Schedule No 9: PRE MERGER VERSUS POST MERGERADVANCES OF SBI& ITS ASSOCIATE BANKS
(ASSETS)
An advance payment, or simply an advance, is the part of a contractually due sum that is paid or received in advance for goods or services,
while the balance included in the invoice will only follow the delivery. Advance payments are recorded as a prepaid expense in accrual
accounting for the entity issuing the advance. Advanced payments are recorded as assets on the balance sheet.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
Merger
Total 1379224.01 100.00 1564477.73 100.00 1674016.55 100.00 1849299.38 100.00 1868395.14 100.00 1934880.19 100.00 2185876.92 100.00
32
The table no 4.23 reveal that Advances of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-
merger). Before the merger and after the merger state bank of India and its associate bank's advance amount has increased every year.
33
Table No: 4.24: Schedule No 9.1: PRE MERGER VERSUS POST MERGER BILLS PURCHASED AND DISCOUNTED OF SBI& ITS
The bank may be purchase or discount clean or documentary bills at the current rate of interest. The bills purchased issued by the buyer in the
name of Letter of Credit, then the seller deposit that bill into the bank and convert into cash. Banks collect the money from the buyer on behalf
of the seller. While discounting the bill, the Bank buys the bill before the maturity date of the bill after a discount charge to the customer's
account. The transaction is practically an advance against the security of the bill and the discount represents the interest on the advance from the
date of purchase of the bill until it is due for payment.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
Merger
Total 100684.39 100.00 90827.02 100.00 108081.88 100.00 105078.32 100.00 78561.72 100.00 67613.56 100.00 80278.87 100.00
34
120000
108081.88
105078.32
100684.39
100000 90827.02
78561.72 80278.87
80000
67613.56
60000
40000
20000
0
2012-13 2013
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Figure 4.3.shows
shows the trends of bill purchased and discounted during pre and post merger
The table no 4.24 and figure no 4.3 explains that bills purchased and discounted by SBI and associates banks from 2012-13
2012 to 2016-17 (pre-
merger) and 2017-18 to 2018-19 (post-merger).

merger). In the 2013-14
2013 14 bills purchased & discounted has little reduced but in the year 2014-15
2014 around
20% increasing. In the year 2016-17

17 again it has reduced. After the merger also again it has reduced but the bank is growing the bills for
upcoming years.
35
Table No: 4.25: Schedule No 9.2: PRE MERGER VERSUS POST MERGERCASH CREDITS, OVERDRAFTS & LOANS OF SBI&
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
Merger
Total 611786.70 100.00 678720.17 100.00 708624.02 100.00 760391.60 100.00 741205.54 100.00 746252.38 100.00 776633.46 100.00
The table no 4.25 reveal that (cash credit, overdraft & loans) by SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to
2018-19 (post-merger). it was consistently increasing from every year before and after the merger.
36
Table No: 4.26 - Schedule No 9.3: PRE MERGER VERSUS POST MERGER TERM LOANS OF SBI& ITS ASSOCIATE BANKS
(ASSETS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
Merger
Total 666752.93 100.00 794930.54 100.00 857310.65 100.00 983829.47 100.00 1048627.88 100.00 1121014.25 100.00 1328964.59 100.00
The table no 4.26 reveal that term loans given by SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-
merger). In the pre-merger state bank of India and its associate banks, issuing term loans was moderately increasing every year from 2012-13 to
2016-17. After the merger also increasing issuing term loans, so the merger does not affect term loans.
37
Table No: 4.27 - Schedule No 9.4: PRE MERGER VERSUS POST MERGER SECURED BY TANGIBLE ASSETS OF SBI& ITS
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
Merger
Total 1063205.98 100.00 1271872.72 100.00 1326757.20 100.00 1440428.37 100.00 1478992.06 100.00 1505988.72 100.00 1582764.42 100.00
The table no 4.27 shows that secured tangible assets by SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 (post-
merger). In the pre-merger state bank of India and its associate banks, the tangible assets from 2012-13 (Rs 1063205.98) to 2016-17 (Rs
1478992.06) around 39% increase in the last 5 years. After the merger, the tangible assets have little increased so the merger does not affect term
asset value.
38
Table No: 4.28 - Schedule No 9.5: PRE MERGER VERSUS POST MERGER COVERED BY BANK/GOVT. GUARANTEES OF SBI&
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
6 SBT 1289.52 1.28 245.45 0.38 221.33 0.40 0.39 0.00 0.00 NIL NIL NIL NIL
Post-
Merger
Total 100411.15 100.00 63942.96 100.00 54977.61 100.00 61928.06 100.00 82198.44 100.00 68651.17 100.00 80173.16 100.00
The table no 4.28 reveals advances in India and outside India, to the extent, they covered by a guarantee of Indian and foreign governments and
Indian and foreign banks and DICGC & ECGC includes that by SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to
39
2018-19 (post-merger). In the pre-merger state bank of India and its associate banks, it was on fluctuating every year. After the merger,
government guarantees have reduced due to banks' losses & merger but that loss immediately recovered in the year 2018-19.
Table No: 4.29 - Schedule No 9.6: PRE MERGER VERSUS POST MERGER ADVANCES IN INDIA OF SBI& ITS ASSOCIATE
BANKS (ASSETS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
Merger
Total 1211816.39 100.00 1352533.35 100.00 1441241.53 100.00 1585630.57 100.00 1584958.53 100.00 1636607.79 100.00 1884879.47 100.00
The table no 4.29 exhibits that total advances in India in the priority sector, public sector, banks and other sectors paid by SBI and associates
banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-merger). In the pre-merger state bank of India and its associate
banks, total advances in India from 2012-13 to 2015-16 was moderately increasing every year. In the year 2016-17 has little reduced, but after
the merger, the total advances in India have little increased so the merger does not affect.
40
Table No: 4.30 - Schedule No 10: PRE MERGER VERSUS POST MERGER FIXED ASSETS OF SBI& ITS ASSOCIATE BANKS
(ASSETS)
Assets that are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment. This
assets not resale, it helps to the production process, rendering of service and operating the banking industry. Premises wholly or partly owned by
the banking company for business, furniture, and fixtures for use in official purposes. Fixed assets divided into Tangible assets and Intangible
assets. Tangible assets include plant & machinery, Furniture & fittings, land & building, and vehicles, etc…Intangible assets include patents,
copyrights, goodwill trademarks, and licenses.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 9160.83 100.00 10396.25 100.00 12231.23 100.00 14279.46 100.00 49883.74 100.00 39992.25 100.00 39197.57 100.00
41
Pre
Pre-merger versus Post-merger trend of fixed assets
49883.74
50000
45000 39992.25 39197.57
40000
35000
30000
25000
20000
14279.46
15000 12231.23
9160.83 10396.25
10000
5000
0
2012-13
13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
19
Figure 4.4 shows the trends of fixed assets before and after merger
The table no 4.30 and figure no 4.4 shows that fixed assets of SBI and associates banks from 2012-13
13 to 2016
2016-17 (pre-merger) and 2017-18 to
2018-19 (post-merger). In the pre-merger

merger state bank of India and its associate banks, fixed assets were moderately increasing from 2012
2012-13 to
2015-16, but suddenly in the year, 2016-17

17 fixed assets were increased more than 300% in state banks and its associates' banks. But after the
merger the fixed assets value has reduced, it is due to the depreciation value and consolidation of assets.
42
Ho: There is no significant relationship between increasing fixed assets and increasing depreciation rate
H1: There is a significant relationship between increasing fixed assets and increasing depreciation rate
Table No: 4.31: Correlation analysis of fixed assets and deprecation
Correlations
Fixed Depreciation
Control Variables
Assets Value
Correlation 1.000 .733
Fixed Assets Significance (2-

.097
tailed)
Df 0 4
Depreciation
Rate Correlation .733 1.000
Depreciation Significance (2-
.097
Value tailed)
Df 4 0
Partial correlation is a measure of the strength and direction of the linear relationship between two continuous variables while controlling the
effect of one or more other continuous variables known as covariate and control variables. Here continuous variables are increasing fixed assets
and increasing depreciation value. The controlling variable is the depreciation rate. There is a high positive correlation between the increasing
fixed assets in pre and post-merger and increasing depreciation value. It denotes the significant value is higher than the p-value (0.097) at 5%
significant level. So it is concluded that the null hypothesis is accepted, it means there is no significant relationship between increasing fixed
assets and increasing depreciation rate.
43
Table No: 4.32 - Schedule No 11: PRE MERGER VERSUS POST MERGER OTHER ASSETS OF SBI& ITS ASSOCIATE BANKS
(ASSETS)
Other assets include the interest loans include consumer loans, inter-office adjustment (net), Tax paid in advances/ tax deducted at source,
stationary and stamps, and credit card loans, and capital investment loans.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI
Pre-Merger 47892.03 75.97 43568.21 75.53 102209.71 80.49 140408.41 82.56 154007.72 80.08 NIL NIL NIL NIL
Post-
7 SBI
Merger
Total 63044.15 100.00 57684.25 100.00 126988.48 100.00 170070.59 100.00 192312.79 100.00 226994.20 100.00 266327.70 100.00
The table no 4.32 reveal that other assets of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-
merger). In the pre-merger and post-merger on state bank of India and its associate banks, other assets were moderately increasing from 2014-15
to 2018-19, but in the year, 2013-14 other assets were reduced by nearly 10% in state bank and its associates' banks.
44
Table No: 4.33 - Schedule No 11.1: PRE MERGER VERSUS POST MERGER INTEREST ACCRUED OF SBI& ITS ASSOCIATE
BANKS (ASSETS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 15930.01 100.00 17839.69 100.00 19552.11 100.00 19703.20 100.00 23584.81 100.00 25714.47 100.00 26141.97 100.00
The table no 4.33 reveal that interest accrued assets of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19
(post-merger). In the pre and post-merger on state bank of India and its associate banks, other assets were moderately increasing from every
year.
45
Table No: 4.34 -Schedule No 3:PRE MERGER VERSUS POST MERGER DEPOSITS OF SBI& ITS ASSOCIATE BANKS
(LIABILITIES)
Deposit means banks have been collecting small kind of money from the public. It refers to when a portion of funds is used as security or
collateral for the delivery of goods or services. Another kind of deposit involves a transfer of funds to another party, such as a bank, for
safekeeping. (Rs.in Crores)
Bank
S.N Pre & Post
s 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
o Merger
Name
Pre-Merger
Post-
Merger
Total 1618444.90 100.00 1828363.10 100.00 2039756.84 100.00 2240542.10 100.00 2584616.81 100.00 2706343.29 100.00 2911386.01 100.0
46
The table no 4.34 indicates that the total deposit value in SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-
19 (post-merger). This table includes various types of deposits such as; demand deposit, saving bank deposit and term deposit. Overall deposit in
SBI and its associate banks were increasing every year, it means most of the public has been using the SBI and its banking services.
Table No: 4.35 - Scheduled No 3.1: PRE MERGER VERSUS POST MERGER DEMAND DEPOSITS OF SBI& ITS ASSOCIATE
BANKS (LIABILITIES)
A demand deposit is a deposit for a consistent withdrawal-like saving bank account or current bank account etc. The depositor has the right to
utilize the money at any time. Demand deposit also called a “call deposit or sight deposit”.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
7 SBI
Merger
Total 136099.81 100.00 140993.11 100.00 152855.34 100.00 169462.99 100.00 187224.98 100.00 190173.89 100.00 2058752.48 100.0
47
The table no 4.35 expresses that demand deposit of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 (post-merger).
The customers’ are don’t want to keep money in their hands, so they are depositing and withdrawing at any time under the deposit scheme.
Demand deposit was continuously increasing every year, it means most of the customers are using banking transactions more.
48
H0: There is no significant relationship of increasing demand deposit every year in SBI& Its associate banks between pre and post-
merger
H1: There is a significant relationship of increasing demand deposit every year in SBI& Its associate banks between pre and post-
merger
Table No: 4.36 Correlation analysis of demand deposit every year in SBI& its associate banks
Correlations
Post-
Pre-merger
merger
State Bank of State Bank of State Bank State Bank State Bank State Bank of State Bank
Bikaner & Jaipur Hyderabad of India of Mysore of Patiala Travancore of India
Pearson Correlation 1 0.846 .927* 0.805 -0.511 .968** -1.000**
State Bank of
Sig. (2-tailed) .071 .023 .101 .379 .007
Bikaner & Jaipur
N 5 5 5 5 5 5 2
Pearson Correlation 1 .960** .975** -0.309 .934* 1.000**
State Bank of
Sig. (2-tailed) .009 .005 .613 .020
Hyderabad
N 5 5 5 5 5 2
Pearson Correlation 1 .908* -0.394 .970** 1.000**
State Bank of India Sig. (2-tailed) .033 .512 .006
N 5 5 5 5 2
State Bank of Pearson Correlation 1 -0.128 .922* 1.000**
Mysore Sig. (2-tailed) .838 .026
49
N 5 5 5 2
Pearson Correlation 1 -0.337 1.000**
State Bank of
Sig. (2-tailed) .580
Patiala
N 5 5 2
Pearson Correlation 1 1.000**
State Bank of
Sig. (2-tailed)
Travancore
N 5 2
Pearson Correlation 1
State Bank of India Sig. (2-tailed)
N 2
*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).
Correlation is a measure of the strength and direction of the linear relationship between in six banks in pre- merger and one bank in post-merger
variables. Here each banks has receiving the deposit from their customers’ in terms of demand deposit. From the table it is found that there is a
positive correlation in Pre-merger duration. The variables between “State Bank of Bikaner & Jaipur”& “State Bank of India” (r=0.927), and
“State Bank of Travancore” (r=0.968), then “State Bank of Hyderabad” & “State Bank of India (r=0.60), State bank of Mysore (r=0.975) and
State Bank of Travancore” (r=0.934), then “State Bank of India with State Bank of Mysore (r=0.908) and State Bank of Travancore (r=0.970)”
then “State Bank of Mysore with State Bank of Travancore (r=0.922)” are highly positive correlated among the banks. After the merger the State
50
bank of India Correlated with all banks with high positive correlations (r=1.000), except state bank of Bikaner and Jaipur is having very strong
negative correlation with State bank of India in after the merger.
Table No: 4.37 - Schedule No: 3.2: PRE MERGER VERSUS POST MERGER SAVINGS BANK DEPOSITS OF SBI& ITS
The savings bank deposit includes all savings bank deposits (including in-operative saving bank accounts). This kind of deposit account is the
primary aim of enhancing financial inclusion among the economically weaker sections of society.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
Merger
Total 523624.72 100.00 596825.41 100.00 652035.89 100.00 740117.34 100.00 941818.09 100.00 1013774.47 100.0 1091751.97 100.0
51
The table no 4.37 divulges that savings bank deposit in SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19
(post-merger). Banks were getting all kinds of saving bank deposit from the customers, its keep on increasing every year in SBI and its
associates' banks in pre and post-merger.
52
Table No: 4.38 Correlation analysis of saving bank deposit
H0: There is no significant relationship of increasing saving bank deposit every year in SBI& its associate banks between pre and post-merger
H1: There is significant relationship of increasing saving bank deposit every year in SBI& its associate banks between pre and post-merger
Correlations
Pre-Merger Post-Merger
State Bank of State Bank of State Bank State Bank of State Bank of State Bank of State Bank of
Bikaner & Jaipur Hyderabad of India Mysore Patiala Travancore India
State Bank of Pearson Correlation 1 .995** .998** .999** .996** .995** 1.000**
Bikaner & Sig. (2-tailed) .000 .000 .000 .000 .000
Jaipur N 5 5 5 5 5 5 2
Pearson Correlation 1 .997** .996** .997** .998** 1.000**
State Bank of
Sig. (2-tailed) .000 .000 .000 .000
Hyderabad
N 5 5 5 5 5 2
Pearson Correlation 1 1.000** 1.000** .999** 1.000**
State Bank of
Sig. (2-tailed) .000 .000 .000
India
N 5 5 5 5 2
Pearson Correlation 1 .999** .998** 1.000**
State Bank of
Sig. (2-tailed) .000 .000
Mysore
N 5 5 5 2
State Bank of Pearson Correlation 1 .999** 1.000**
Patiala Sig. (2-tailed) .000
53
N 5 5 2
State Bank of
Sig. (2-tailed)
Travancore
N 5 2
State Bank of
Sig. (2-tailed)
India
N 2
Correlation is a measure of the strength and direction of the linear relationship between in six banks in pre- merger and one bank in post-merger
variables. Here each bank has receiving the deposit from their customers’ in terms of saving bank deposit. From the table it is found that there is
a positive correlation in Pre-merger duration. The variables between “State Bank of Bikaner & Jaipur with State Bank of Hyderabad (r=0.995),
State bank of India (r=0.998), State bank of Mysore (r=0.999), State Bank of Patiala 9(r=0.996), and “State Bank of Travancore” (r=0.995), then
“State Bank of Hyderabad” & “State Bank of India (r=0.997), State bank of Mysore (r=0.996), State Bank of Patiala (r=0.997) and State Bank of
Travancore” (r=0.998), then “State Bank of India with State Bank of Mysore (r=1.000), State Bank of Patiala (r=1.000) and State Bank of
Travancore (r=0.999)” than “State Bank of Mysore with State Bank of Patiala (r=0.999) and State Bank of Travancore (r=0.998)” then “State
Bank of Patiala with State Bank of Travancore (r=0.999)” are highly positive correlated among the banks. After the merger the State bank of
India Correlated with all banks with high positive correlations (r=1.000) with State bank of India in after the merger.
54
Table No: 4.39 - Schedule No 3.3: PRE MERGER VERSUS POST MERGER TERM DEPOSITS OF SBI& ITS ASSOCIATE BANKS
(LIABILITIES)
A term deposit is a deposit repayable after a specific term to the investor by the financial institution. Investment is invested for an agreed rate of
interest over a fixed amount of time, or term.
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Post-
7 SBI NIL NIL NIL NIL NIL 1502394.93 100.00 1613758.79 100
Merger
Total 958720.37 100.00 1090544.58 100.00 1234865.61 100.00 1330961.77 100.00 1455573.74 100.00 1502394.93 100.00 1613758.79 100
The table no 4.39 explains that term deposit in SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-
merger). This kind of term deposit will do by some fixed deposit customers for a specific duration. SBI and its associate banks have been
increasing this term deposits from their loyal customers.
55
Table No: 4.40 Correlation analysis of term deposits
H0: There is no significant relationship of increasing Term Deposit every year in SBI& Its associate banks between pre and post-merger
H1: There is a significant relationship of increasing Term Deposit every year in SBI& its associate banks between pre and post-merger
Correlations
Pre-Merger Post-Merger
State Bank of State Bank of State Bank State Bank State Bank State Bank of State Bank of
Bikaner & Jaipur Hyderabad of India of Mysore of Patiala Travancore India
Pearson Correlation 1 0.405 0.876 .937* 0.638 0.798 -1.000**
State Bank of
Sig. (2-tailed) .498 .051 .019 .247 .106
Bikaner & Jaipur
N 5 5 5 5 5 5 2
Pearson Correlation 1 0.213 0.335 0.585 -0.112 1.000**
State Bank of
Sig. (2-tailed) .731 .582 .301 .858
Hyderabad
N 5 5 5 5 5 2
Pearson Correlation 1 .985** 0.237 .896* 1.000**
State Bank of
Sig. (2-tailed) .002 .702 .040
India
N 5 5 5 5 2
Pearson Correlation 1 0.398 0.876 1.000**
State Bank of
Sig. (2-tailed) .507 .051
Mysore
N 5 5 5 2
State Bank of Pearson Correlation 1 0.271 -1.000**
56
Patiala Sig. (2-tailed) .659
N 5 5 2
State Bank of
Sig. (2-tailed)
Travancore
N 5 2
State Bank of
Sig. (2-tailed)
India
N 2
*. Correlation is significant at the 0.05 level (2-tailed).
From the table it is found that there is a positive correlation in Pre-merger duration. The variables between “State Bank of Bikaner & Jaipur”&
“State Bank of Mysore” (r=0.937), then “State Bank of India with State Bank of Mysore (r=0.985) and State Bank of Travancore (r=0.896)” are
highly positive correlated among the banks. After the merger the State bank of India Correlated with all banks with high positive correlations
(r=1.000), except state bank of Bikaner and Jaipur and State Bank of Patiala are having very strong negative correlation with State bank of India
in after the merger.
57
Part 3: Profit/loss position based analysis during pre and post-merger.
Table No: 4.41 - Schedule No 13: PRE MERGER VERSUS POST MERGER EARNINGS OF SBI& ITS ASSOCIATE BANKS
(TOTAL INTEREST EARNED)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
Merger
Total 163765.67 100.00 184172.19 100.00 202086.23 100.00 214971.72 100.00 223959.78 100.00 220499.32 100.00 242868.65 100.00
The table no 4.41 shows that total interest earned of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19
(post-merger). Interest earned includes (interest/discount/bills, income on investments, interest from RBI and inter-banks, etc.). In the pre-merger
state bank of India and its associate banks, total interest was moderately increasing every year till 2016-17. After the merger, the interest has
reduced a little bit in the next year of merger again the banks have recovered from the loss.
58
Table No: 4.42 - Schedule No 13.1: PRE MERGER VERSUS POST MERGER EARNINGS OF SBI& ITS ASSOCIATE BANKS I
(INTEREST/DISCOUNT EARNED ON ADVANCES/BILLS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 125256.41 100.00 139902.15 100.00 151355.98 100.00 154847.30 100.00 154110.60 100.00 141363.17 100.00 161640.23 100.00
The table no 4.42 reveal that (Interest / Discount on Advances / Bills) of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and
2017-18 to 2018-19 (post-merger). In the pre-merger state bank of India and its associate banks, (Interest / Discount on Advances / Bills) earning
was slowly increasing from 2012-13 to 2015-16, but suddenly in the year, 2016-17 earning was started to decrease in state bank and its
59
associates' banks. In post-merger, the earning was reduced compare with pre-merger due to compensating merger expenses but the bank has
recovered in the next year itself.
Table No: 4.43 - Schedule No 13.2: PRE MERGER VERSUS POST MERGER EARNINGS OF SBI& ITS ASSOCIATE BANKS
(INCOME ON INVESTMENTS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 35952.40 100.00 41658.45 100.00 45235.94 100.00 53134.67 100.00 60564.88 100.00 70337.62 100.00 74406.16 100.00
60
The table no 4.43 reveal that income from investment of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-
19 (post-merger). In the pre-merger state bank of India and its associate banks, income from investment earning was increasing from 2012-13 to
2016-17. In post-merger, the earning is growing, so after the merger, the SBI maintains the same level of investment and return also.
(INTEREST ON BALANCES WITH RBI AND OTHER INTER-BANK FUNDS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI
Post-
7 SBI
Merger
Total 1005.69 100.00 890.73 100.00 803.00 100.00 926.87 100.00 2412.18 100.00 2250.00 100.00 1179.07 100.00
The table no 4.44 shows that interest on balance with RBI and other inter-bank funds of SBI and associates banks from 2012-13 to 2016-17 (pre-
merger) and 2017-18 (post-merger). In the pre-merger state bank of India and its associate banks, interest kept on fluctuating from 2012-13 to
61
2015-16, but suddenly in the year, 2016-17 interest was increased around 260% in state bank and its associates' banks. In post-merger, the
interest has reduced around 6% from 2016-17 to 2017-18, again it has reduced 47% in the year 2018-19 because the inter-bank funds have
reduced in pre-merger that funds have to be compensated on the post-merger.
(INTEREST EARNED - OTHERS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI
Post-
7 SBI
Merger
Total 1551.17 100.00 1720.86 100.00 4691.30 100.00 6062.88 100.00 6872.12 100.00 6548.53 100.00 5643.19 100.00
62
The table no 4.45 indicates that other interest earned not include in the above heads of SBI and associates banks from 2012-13 to 2016-17 (pre-
merger) and 2017-18 to 2018-19 (post-merger). In the pre-merger state bank of India and its associate banks, in the year 2014-15 interest was
increased around 260% in state bank and its associates' banks. In post-merger, the interest has around 5% reduced and the second year of the
merger around 14% reduced because the inter-bank funds have reduced in pre-merger that funds have to be compensated on the post-merger.
63
Table No: 4.46 - Schedule No 14: PRE MERGER VERSUS POST MERGER EARNINGS OF SBI& ITS ASSOCIATE BANKS
(TOTAL OTHER INCOME)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI
Pre-Merger
16036.84 81.21 18552.92 81.70 22575.89 81.75 27845.37 83.30 35460.93 82.96 NIL NIL NIL NIL
Post-
7 SBI
Merger
Total 19746.18 100.00 22707.51 100.00 27616.45 100.00 33429.56 100.00 42747.00 100.00 44600.69 100.00 36774.89 100.00
The table no 4.46 indicates that total other income of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19
(post-merger). In the pre-merger state bank of India and its associate banks, total other income (includes- commission, Discount received, profit
on the sale of investment & Assets, and other income) was growing from every year. In post-merger, total other income was increasing as a 4%
but in the second year of the merger, the total income has reduced around 18% of previous year.
64
(COMMISSION, EXCHANGE AND BROKERAGE)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 14114.55 100.00 15357.69 100.00 16185.01 100.00 18067.73 100.00 19857.84 100.00 22996.80 100.00 23303.89 100.00
The table no 4.47 indicates that total other income of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19
(post-merger). In the pre-merger state bank of India and its associate banks, the income on commission, exchange and brokerage was growing
from every year. Income was increasing averagely 8% in both pre and post-merger duration.
65
(PROFIT (LOSS) ON SALE OF INVESTMENTS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI
Pre-Merger
1101.92 66.58 2279.41 75.63 3618.05 77.48 5168.80 82.04 10749.62 79.05 NIL NIL NIL NIL
Post-
7 SBI
Merger
Total 1655.04 100.00 3013.86 100.00 4669.89 100.00 6300.13 100.00 13598.94 100.00 13423.35 100.00 3146.86 100.00
The table no 4.48 indicates that the profit on the sale of investments of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and
2017-18 to 2018-19 (post-merger). In the pre-merger state bank of India and its associate banks, the profit was kept on increasing from 2012-13
to 2015-16, but suddenly in the year, 2016-17 profit was double in state bank and its associates' banks. In the second year of post-merger, the
profit has drastically reduced because the investment value may be reduced.
66
(PROFIT (LOSS) ON EXCHANGE TRANSACTIONS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 1866.17 100.00 2258.27 100.00 2340.04 100.00 2185.16 100.00 2747.87 100.00 2484.60 100.00 2155.75 100.00
The table no 4.49 indicates that the profit on exchange transactions of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and
2017-18 to 2018-19 (post-merger). The profit trend is increasing in the first three years and decreased in the fourth year and followed by an
increase in the fifth year. In post-merger, the trend shows a reduction in profit.
67
(MISCELLANEOUS INCOME)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 2156.16 100.00 2326.26 100.00 4472.99 100.00 7048.57 100.00 6583.34 100.00 6846.58 100.00 9979.39 100.00
The table no 4.50 indicates that the miscellaneous income of SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to
2018-19 (post-merger). The income trend kept on increasing in the first four years and decreased in the fifth year. In the 1st year of post-merger
the income level little increase but the second year of post-merger around 46% increased.
68
Table No: 4.51 - Schedule No 15: PRE MERGER VERSUS POST MERGER EXPENDITURES OF SBI& ITS ASSOCIATE BANKS
(TOTAL INTEREST EXPENDED)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 88860.90 100.00 106533.41 100.00 121184.56 100.00 132769.95 100.00 142584.16 100.00 145645.60 100.00 154519.78 100.00
The table no 4.51 indicates that the total interest paid by the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to
2018-19 (post-merger). The total interest (includes interest on term deposit, interest on borrowings from RBI and other banks, etc…) was
continuously increasing in the pre and post-merger. It indicates that the SBI and its associates' banks borrowing more funds from the outside for
that they are paying more interest.
69
Table No: 4.52 - Schedule No 15.1: PRE MERGER VERSUS POST MERGER EXPENDITURES OF SBI& ITS ASSOCIATE BANKS
(INTEREST ON DEPOSITS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 79179.15 100.00 96265.74 100.00 109289.43 100.00 121444.03 100.00 132296.70 100.00 135725.70 100.00 140272.36 100.00
The table no 4.52 shows that interest on deposit by the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19
(post-merger). The interest on term deposit was continuously increasing in the pre and post-merger. Post-merger deposit reduces while
comparing pre-merger. It indicates that depositing by the customer has reduced or otherwise SBI may reduce the interest rate.
70
(INTEREST ON RBI/ INTER - BANK BORROWINGS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI
Pre-Merger
3885.64 90.79 4124.11 88.76 5150.79 85.16 3972.04 82.85 4154.30 83.31 NIL NIL NIL NIL
Post-
7 SBI
Merger
Total 4279.62 100.00 4646.38 100.00 6048.62 100.00 4794.37 100.00 4986.79 100.00 5312.43 100.00 9838.96 100.00
The table no 4.53 indicates that the total interest paid by the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to
2018-19 (post-merger). The interest in borrowings from RBI and other banks from 2012-13 to 2014-15was increasing but suddenly in the year
2015-16, the paying interest value is 20% reduced because the borrowings from RBI and other banks may be less. After the merger the
71
SBIpaying more interest compared with 1st year of merger 2nd year, it was increasing around 85% of the previous year (2017-18), the reason may
SBI borrow more funds from RBI and other banks.
(INTEREST EXPENDED - OTHERS)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI
Pre-Merger
3700.36 68.50 3737.14 66.48 3794.48 64.90 4261.33 65.24 3784.21 71.39 NIL NIL NIL NIL
Post-
7 SBI
Merger
Total 5402.12 100.00 5621.30 100.00 5846.52 100.00 6531.55 100.00 5300.68 100.00 4607.47 100.00 4408.45 100.00
The above table no 4.54 shows that the other kind of interest or discount paid to all borrowings from the financial institution by the SBI and
associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-merger). The other kind of interest or discount paid to all
borrowings from the financial institution was constantly increasing in the pre-merger, but in the year 2016-17, the paying interest value has
72
reduced. After the merger, the paying interest or discount reduces while comparing pre-merger. It indicates that after merger SBI has reduces the
other kind of interest or discount paid to all borrowings from the financial institution. It includes administrative expenses, selling and distribution
expenses, director fees and other indirect expenses.
Table No: 4.55 - Schedule No 16: PRE MERGER VERSUS POST MERGER EXPENDITURES OF SBI& ITS ASSOCIATE BANKS
(TOTAL OPERATING EXPENSES) (Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI
Pre-Merger
26068.99 79.65 29284.42 78.78 35725.85 79.01 38053.87 79.16 41782.37 80.22 NIL NIL NIL NIL
Post-
7 SBI
Merger
Total 32729.85 100.00 37171.55 100.00 45217.81 100.00 48075.08 100.00 52084.12 100.00 59943.45 100.00 69687.74 100.00
The table no 4.55 shows that total operating expenses of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to
2018-19 (post-merger). The operating expenses, which are most required to operate a banking institution, the total operating expenses was
73
consistently increasing in the pre and post-merger. It indicates that the bank has to try to reduce the operating expenses then only they can earn
more profit.
Null Hypothesis: There is no significant difference between the operating expenses of pre and post-merger
Alternative Hypothesis: There is a significant difference between the operating expenses of pre and post-merger
Table No: 4.56 Descriptive Table of Total operating expenses
One-Sample Statistics
Particular N Mean Std. Deviation Std. Error Mean
Pre-Merger 5 43055.6820 7947.13254 3554.06572
Post-Merger 2 64815.5950 6890.25354 4872.14500
According to the descriptive statistics of one-sample T Test, the valid sample size is in pre-merger n-5 and post-mergern-2. The sample data
produces a two difference in the mean scores of the total operating expenses variable. In particular, the data analysis shows that the subjects in
the post-merger higher than the pre-merger expenses.
74
Table No: 4.57 t-test of total operating expenses
One-Sample Test
Test Value = 1
95% Confidence Interval of
Sig. (2- Mean
Particulars t Df the Difference
tailed) Difference
Lower Upper
Pre-Merger 12.114 4 .000 43054.68200 33187.0136 52922.3504
Post-Merger 13.303 1 .048 64814.59500 2908.1231 126721.0669
The observed t-value in pre and post-merger (12.114 & 13.303), the degrees of freedom ("4 & 1"), and the statistical significance in pre-merger
(0.000) & post-merger (0.048), is less than the 5% (0.05) significant level. Therefore, it can be concluded that the Total operating expenses are
statistically significantly different.
75
(PAYMENTS TO AND PROVISIONS FOR EMPLOYEES)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 21188.31 100.00 23345.92 100.00 28590.26 100.00 29665.47 100.00 31097.91 100.00 33178.68 100.00 41054.71 100.00
The table no 4.58 shows that payment and provisions to employees of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and
2017-18 to 2018-19 (post-merger). The payment and provisions to employees were consistently increasing in the pre and post-merger. It
indicates that the bank has to provide salary employees and providing other amenities.
76
(RENT, TAXES AND LIGHTING)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 2652.21 100.00 3095.28 100.00 3767.74 100.00 4335.02 100.00 4751.67 100.00 5140.43 100.00 5265.66 100.00
The table no 4.59 shows the expenses of Rent, Taxes and lighting of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and
2017-18 to 2018-19 (post-merger). The payment rent, taxes, and lighting were as are infrastructure expenses were consistently increasing in the
pre and post-merger.
77
(PRINTING AND STATIONERY)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 347.05 100.00 374.46 100.00 424.34 100.00 459.17 100.00 458.84 100.00 518.14 100.00 498.95 100.00
The table no 4.60 explains the expenses of printing and stationery of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and
2017-18 to 2018-19 (post-merger). The price value of printing and stationery expenses has decreased 2nd year of the merger.
78
(ADVERTISEMENT AND PUBLICITY)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
3 SBI
Pre-Merger
206.63 78.63 384.35 84.50 278.26 77.69 284.64 79.22 307.64 81.14 NIL NIL NIL NIL
Post-
7 SBI
Merger
Total 262.78 100.00 454.83 100.00 358.14 100.00 359.28 100.00 379.16 100.00 358.33 100.00 354.06 100.00
The table no 4.61 shows that expenses on advertisement and publicity of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger)
and 2017-18 2018-19 (post-merger). The advertisement and publicity expenses keep on changing in the pre-merger duration. But after the
merger advertisement and publicity expenses have reduced because of a single bank (SBI) advertisement only.
79
(DEPRECIATION ON BANK'S PROPERTY)
(Rs.in Crores)
Bank
S.N Pre & Post
s 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
o Merger
Name
Pre-Merger
Post- 100.0
7 SBI
Merger
NIL NIL NIL NIL NIL 2919.47 0
3212.31 100.00
Total 1282.51 100.00 1453.76 100.00 1716.57 100.00 1449.44 100.00 2158.68 100.00 2919.47 100.00 3212.31 100.00
The table no 4.62 shows the expenses of Rent, Taxes and lighting of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and
2017-18 to 2018-19 (post-merger). Depreciation of bank property has increased every year in pre and post-merger. It indicates that the bank
property value has been falling.
80
(DIRECTORS' FEES, ALLOWANCES AND EXPENSES)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 2.10 100.00 2.71 100.00 2.42 100.00 1.68 100.00 2.06 100.00 0.62 100.00 1.35 100.00
The table no 4.63 shows that expenses of director’s fees, allowances provided by the SBI and associates banks from 2012-13 to 2016-17 (pre-
merger) and 2017-18 to 2018-19 (post-merger). This kind of expense can’t avoid and mandatory expenses also, but in the second year of the
merger it has increased double.

81
(AUDITORS' FEES AND EXPENSES) (Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 192.09 100.00 182.21 100.00 248.05 100.00 256.49 100.00 280.15 100.00 289.18 100.00 293.68 100.00
The table no 4.64 shows that expenses auditor fees of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-
19 (post-merger). The auditor fees were consistently increasing in the pre and post-merger. It indicates that auditor fees and expenses can’t
avoid.
82
(LAW CHARGES)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 142.71 100.00 158.28 100.00 220.47 100.00 221.61 100.00 211.78 100.00 199.03 100.00 261.84 100.00
The table no 4.65 shows that law charges of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-
merger). The law charges were consistently increasing in the pre and post-merger. The 1st year of merger law charges has been a little reduced
but again the next year increased.
83
(POSTAGE, TELEGRAMS, TELEPHONES, ETC)
(Rs.in Crore)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 492.12 100.00 579.58 100.00 752.18 100.00 729.98 100.00 677.17 100.00 867.04 100.00 387.01 100.00
84
The table no 4.66 reveals that postage, telegrams, and telephone of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and
2017-18 to 2018-19 (post-merger). The expenses were moderately increasing from 2012-13 to 2014-15 and these expenses have reduced 2015-
16 and 2016-17. After 2nd year merger the postage, telegrams and telephone expenses has reduced.
Table No: 4. 67 - Schedule No 16.10: PRE MERGER VERSUS POST MERGER EXPENDITURES OF SBI& ITS ASSOCIATE
BANKS (REPAIRS AND MAINTENANCE)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 440.73 100.00 473.00 100.00 528.44 100.00 653.83 100.00 713.28 100.00 826.93 100.00 904.09 100.00
85
The table no 4.67 reveals that repairs and maintenance of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to
2018-19 (post-merger). The repairs and maintenance were consistently increasing in the pre and post-merger. It indicates the merger is a good
process and it helps to reduce the repair and maintenance expenses gradually.
86
(INSURANCE)
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 1262.08 100.00 1584.23 100.00 1968.07 100.00 2113.32 100.00 2273.96 100.00 2759.88 100.00 2845.45 100.00
The table no 4.68 disclose that insurance of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19 (post-
merger). The insurance was consistently increasing in the pre and post-merger.
87
(OTHER EXPENDITURE)
(Rs.in Crores)
Bank
Pre & Post
S.No s 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Merger
Name
Pre-Merger
Post-
7 SBI
Merger
Total 4465.16 100.00 5467.29 100.00 6641.13 100.00 7829.79 100.00 9079.46 100.00 12885.72 100.00 14608.64 100.00
The table no 4.69 reveals that other expenditure of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 to 2018-19
(post-merger). The other expenditure was consistently increasing in the pre and post-merger. It indicates a merger does affect other expenditures
spend by the State bank of India.
88
Table No: 4.70 - PRE MERGER VERSUS POST MERGER OPERATING PROFIT OF SBI& ITS ASSOCIATE BANKS IN INDIA
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
Pre-Merger
Post-
7 SBI
Merger
Total 39787.45 100.00 39806.88 100.00 40477.32 100.00 48857.64 100.00 53733.00 100.00 59510.96 100.00 55436.03 100.00
The table no 4.70 shows that the operating profit of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 (post-
merger). The operating profit in pre and post-merger was good; it was consistently increasing after the merger also. It seems to be banking
operations' most effective one.
89
Null Hypothesis: There is no consistent increasing trend of operating profit between pre and post-merger
Alternative Hypothesis: There is a consistent increasing trend of operating profit between pre and post-merger
Table No: 4.71 Descriptive Statistics on operating profit
Group Statistics
SBI and Its associates Bank N Mean Std. Deviation Std. Error Mean
Operating Pre-Merger 5 44532.4580 6415.75220 2869.21161

Profit Post-Merger 2 57473.4950 2881.41064 2037.46500
The above descriptive table indicates the mean value of pre and post-merger. While comparing this mean value post-merger mean value is high
but based on this mean value we can find that the merger does not affect the operating profit. Therefore, this will be helpful to the State Bank of
India to maximize the operating profit based on the same track.
Hypotheses have been framed to get the statistical evidence to find out the difference between operating profit of pre and post-merger of SBI and
its associates' banks and to prove or disprove independent sample t-test has been administered.
90
Table No: 4.72 t-test on operating profit
Independent Samples Test

Levene's Test
for Equality t-test for Equality of Means
of Variances
Particular 95% Confidence Interval of
Sig. (2- Mean Std. Error
F Sig. t Df the Difference
tailed) Difference Difference
Lower Upper
Operating Equal 4.442 .089 -2.630 5 .047 -12941.03700 4920.67114 -25590.02486 -292.04914
Profit Not Equal -3.677 4.487 .017 -12941.03700 3519.03948 -22306.97637 -3575.09763
From the table, it is understood that the P-value 0.089 is higher than the standard value of P .05, it denotes the null hypothesis as accepted. It
means that there is no consistency of operating profit between pre and post-merger.
91
Table No: 4.73 - PRE MERGER VERSUS POST MERGER NET PROFIT AND LOSS OF SBI& ITS ASSOCIATE BANKS
(Rs.in Crores)
Banks Pre & Post

S.No 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
Name Merger
5 SBP 796.45 5.19 666.76 3.75 447.60 3.27 362.06 2.22 -972.40 -8.39 NIL NIL NIL NIL
Post-
7 SBI
Merger
NIL NIL NIL NIL NIL -6547.45 100.00 862.23 100.00
Total 15333.64 100.00 17783.34 100.00 13668.57 100.00 16301.95 100.00 11589.36 100.00 -6547.45 100.00 862.23 100.00
The table no 4.73 reveals that the net profit of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger) and 2017-18 (post-merger).
The net profit was fluctuating in pre-merger. But after the merger, SBI had a huge loss because some associates banks had losses in pre-merger
that loss may be compensating after the merger.
92
Null Hypothesis: There is no consistent increase of net profit before and after merger
Alternative Hypothesis: There is a consistent increase of net profit before and after merger
Table No: 4.74 Descriptive table on net profit
Group Statistics
Std. Std. Error
SBI and Its associates Bank N Mean
Deviation Mean
Pre-Merger 5 14935.3720 2394.66376 1070.92619
Net Profit
Post-Merger 2 -2842.6100 5239.43497 3704.84000
The above descriptive table indicates the mean value of pre and post-merger. While comparing this mean value post-merger mean value is very
less, based on this mean value we can find that the merger does affect the net profit. So it indicates that State Bank of India has to overcome the
loss in the future.
Hypotheses have been framed to get the statistical evidence to find out the difference between the net profit of pre and post-merger of SBI and
its associates' banks and to prove or disprove an independent sample t-test has been administered.
93
Table No: 4.75 t-test on net profit
Independent Samples Test
Levene's Test
for Equality of t-test for Equality of Means
Variances
Sig. 95% Confidence Interval of the
Mean Std. Error
F Sig. T Df (2- Difference
Difference Difference
tailed) Lower Upper
Equal 4.176 .096 6.693 5 .001 17777.98200 2656.03223 10950.43381 24605.53019

Net Profit
Not Equal 4.610 1.172 .108 17777.98200 3856.51687 -17105.63215 52661.59615
From the table, it is understood that the P-value 0.096 is higher than the standard dvalue of P .05, it denotes the null hypothesis as accepted. It
means there is no consistent increase of net profit before and after merger.
94
Null Hypothesis: There is no significant relationship between the net profit and operating profit of pre and post-merger
Alternative Hypothesis: There is a significant relationship between the net profit and operating profit of pre and post-merger
Table No: 4.76 Correlation analysis of net profit and operating profit
Correlations
Operating Profit Net Profit
Particulars Post- Post-
Pre-Merger Pre-Merger
Merger Merger
Pearson
1
Correlation
Pre-Merger
Sig. (2-tailed)
Operating N 5
Profit Pearson
-1.000** 1
Correlation
Post-Merger
Sig. (2-tailed)
N 2 2
Pearson
-.571 -1.000** 1
Correlation
Pre-Merger
Sig. (2-tailed) .315
N 5 2 5
Net Profit
Pearson
1.000** -1.000** 1.000** 1
Correlation
Post-Merger
Sig. (2-tailed)
N 2 2 2 2
95
Multiple Regressions:
Null Hypothesis: There is no significant relationship between the net profit and Investments, Borrowings, Reserve and Surplus
Alternative Hypothesis: There is a significant relationship between the net profit and Investments, Borrowings, Reserve and Surplus
Table No: 4.77 Multiple Regression Table
Model Summary
Std. Error Change Statistics
Adjusted
Model R R Square of the
R Square
Estimate R Square Change F Change df1 df2 Sig. F Change
1 .923a .852 .704 4976.035 .852 5.757 3 3 .092
a. Predictors: (Constant), Investments, Borrowings, Reserve and Surplus
b. Dependent Variable: Net Profit/ loss
Interpretation:
The above table shows that there is 98.2% relationship between the compared factors as the R square value is at 0.982. It shows that the
compared factors are highly correlated.
96
Figure 4.5 shows dependent variable for Net Profit and Loss
Table No: 4.78 Descriptive table of Net Profit and Loss
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model T Sig.
Std.
B Error Beta
1 (Constant) 7097.321 17195.954 .413 .708
Reserve and Surplus .477 .302 2.025 1.580 .212
Borrowings .001 .066 .005 .008 .994
Investments -.110 .045 -2.825 -2.465 .090
a. Dependent Variable: Net Profit/ loss
Interpretation:
Net Profit / Loss for The Year (Constant)= Reserves and surplus (0.477)+ Borrowings
(0.001)+ Investments (-.110). It shows thatreserves and surplus and borrowings are directly
proportional to net profit and the investments factors are inversely proportional to net profit.
97
Part 4: Analysis of provisions and contingencies before and after the merger
Table No: 4.79- PRE MERGER VERSUS POST MERGER PROVISIONS AND CONTINGENCIES OF SBI& ITS ASSOCIATE
BANKS
(Rs.in Crores)
Bank
S.N Pre & Post
s 2012-13 % 2013-14 % 2014-15 % 2015-16 % 2016-17 % 2017-18 % 2018-19 %
o Merger
Name
Pre-Merger
Post-
7 SBI
Merger
Total 24453.82 100.00 22023.55 100.00 26808.75 100.00 32555.69 100.00 42143.64 100.00 66058.41 100.00 57573.80 100.00
98
Pre-merger versus Post merger trend of provisions and contingencies of the SBI and associates banks
70000
66058.41
60000 57573.8
50000
42143.64
40000
32555.69
30000 26808.75
24453.82
22023.55
20000
10000
0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
Figure 4.6 shows trend of provisions and contingencies of the SBI and associates banks
The table 4.79 and figure no 4.6 show the provisions and contingencies of the SBI and associates banks from 2012-13 to 2016-17 (pre-merger)
and 2017-18 to 2018-19 (post-merger). The provisions and contingencies were little less in 2013-2014, and from 2014-15 consistently increasing
in the pre and post-merger. After merger provisions have increased, but the 2nd year of merger reduced comparatively 1st year of post-merger.
99
Table No: 4.80 - PRE MERGER VERSUS POST MERGER TREND PERCENTAGE ANALYSIS ON PROVISIONS AND
CONTINGENCIES
Particulars Pre-Merger Post- Merger
Year 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Amount
24453.82 22023.55 26808.75 32555.69 42143.64 66058.41 57573.8
(in Crores)
Percentage 100% 90%` 110% 133% 172% 270% 235%
The trend analysis of provisions and contingencies in pre-merger is decreased 10% on the basis of base year but it has increased from 2014-15 to
2016-17 around 10%, 33%, 72% based on the base year value. But the after the merger the provisions has increased around 270% & 235% based
on 2012-13 provisions and contingencies. It indicates after the merger the provisions increased due to effects of losses and more NPA’s .
100
Part 5: Analysis of the impact of merger between SBI and its associate
banks.
Based on the analysis of the merger between SBI and the SBI associate banks through
various resources the following positive and negative impacts were listed by the researcher.
Technology impact:
Technology impact of SBI will be focus on Future Research. This study has covered
maximum in financial perspective only.
Table No: 4.81CUSTOMER SATISFACTIONDATA DURING PRE MERGER

VERSUS POST MERGER SBI AND ITS ASSOCIATE BANKS
Particulars Frequency Percentage

Female 41 34.17
Gender Male 79 65.83
Total 120 100.00
Upto 20 Years 13 10.83
21 to 30 years 38 31.67
Age 31 to 40 years 51 42.50
Above 40 years 18 15.00
Total 120 100.00
Up to SSLC 7 5.83
PUC 10 8.33
Under Graduate 38 31.67
Education
Post Graduate 36 30.00
Doctorate 29 24.17
Total 120 100.00
Home maker 1 0.83
Private Employee 20 16.67
Govt Employee 46 38.33
Occupation Self-Employed
18 15.00
Professional
Business 35 29.17
Total 120 100.00
Upto Rs 20000 27 22.50
Rs 20001-30000 11 9.17
Rs 30001-40000 18 15.00
Monthly Income Rs 40001-50000 48 40.00
Above Rs 50000 16 13.33
Total 120 100.00
101
The above table indicates that out of 120 respondents little more than one third (34.17%) of
the respondents are female and little less than two third (65.83) of the respondent’s male.
Regarding Age of the respondents 10.83% are belonging in upto 20 years, and less than one
third (31.67) of the respondents are belonging 21 to 30 years, and more than two fifth (42.50)
of the respondents are belonging 31 to 40 years, and 15% of the respondents are belonging
above 40 years. Regarding the educational qualification of the respondents: 5.3% of them
are SSLC, 8.33% of the respondents are educated PUC, and less than one third (31.67%) of
the respondent’s qualification is Under-graduate, and more than of one-fourth (30.0%) of the
respondents are completed their post-graduation, and little less than of one fourth (24.17%)of
the respondent are studies Doctorate.
The above analysis includes occupation, it clearly revels that 16.67% of the respondents are
working as a private employee, and more than one third (38.33%) of the respondents are
working Government Employee, 15% of the respondents running their self-employed
professional, and 29.17% of the respondents are doing their own business. With respect to the
income more than one fifth (22.50%) of the respondents are earning monthly Income up to Rs
20,000, and 9.17% of the respondents are earning monthly Income between RS 21001 to
30,000, and 15% of the respondents are earning monthly Income between Rs 30001to 40000,
and two fifth (40.0%) of the respondents *are earning monthly Income between 40,000-
50,000, and 13.33% of the respondents are earning monthly Income above Rs 50000.
102
Table No: 4.82 INDEX OFCUSTOMER SATISFACTION IMPACT DURING PRE
MERGER VERSUS POST MERGER SBI AND ITS ASSOCIATE BANKS
S.NO Particulars HDS DS N S HS Total
After merger the quality of Nos 18 9 37 34 40 120

1
service % 15 7.5 30.8 28.3 33.3 100
Bank Employee's behaviour Nos 31 18 29 33 9 120
2
rafter merger % 25.8 15.0 24.2 27.5 7.5 100
The Trustworthy of After Nos 5 8 10 54 43 120
3
merger % 4.2 6.7 8.3 45.0 35.8 100
Nos 8 10 41 25 36 120
4 Technical support
% 6.7 8.3 34.2 20.8 30 100
Customers Importance has Nos 19 21 18 32 30 120
5
Improved After the merger % 15.8 17.5 15 26.7 25 100
New policy & procedure after Nos 6 11 29 56 18 120
6
the merger % 5 9.2 24.2 46.7 15 100
Charges for Maintain of Nos 53 38 19 7 3 120
7
Minimum Balance % 44.2 31.7 15.8 5.8 2.5 100
Registration of mobile Nos 2 3 36 45 34 120
8
number and immediate update % 1.7 2.5 30 37.5 28.3 100
Net banking service After the Nos 19 13 22 34 32 120
9
Merger % 15.8 10.8 18.3 28.3 26.7 100
The above table reveals that the customer satisfaction variables after the merger of SBI.
According the customer’s point of view exactly one third (33.3%) of the respondents are
highly satisfied on the quality of service offered by SBI after the Merger, and less than one
third (30.8%) of the respondents are saying Neutral the same on the quality of service offered
by SBI after the Merger, 15% &7.5% of the respondents are Highly Dissatisfied &
Dissatisfied the service offered by SBI after the Merger. With respect to bank employee
behaviour after the merger 27.5% & 7.5% of the customers are satisfied and Highly satisfied
respectively, and 25.8% & 15% of the customers are Highly dissatisfied and dissatisfied
respectively.
103
Less than half (45%) of the customers’ were satisfied the trustworthy SBI after the merger,
and more than one third (35.8%) of the customers’ were highly satisfied the trustworthy SBI
after the merger, and 6.7% & 4.2% of the customers’ were dissatisfied & highly dissatisfied
on trustworthy SBI after the merger. As regarding technical support after the merger of SBI
customers are satisfied & highly satisfied and 8.3% & 6.7% of the customers are dissatisfied
and Highly dissatisfied respectively.
The table shows that more than one fourth (26.7%) & 25% of the respondents are satisfied
and highly satisfied respectively, and 17.5% and 15.8% respondents are dissatisfied and
highly dissatisfied about customer importance in SBI after the merger. With respect to Less
than (46.7%) of the respondents are satisfied with new policy and procedure after the merger
of SBI. As per opinion of the respondents making charges for maintaining minimum balance
in SBI account after the merger, around 44.2% & 31.7% of the respondents are highly
dissatisfied and dissatisfied respectively. Around 37.5% and 28.3% of the respondents are
satisfied & highly satisfied about the registration of mobile number and getting immediate
update account details after the merger of SBI, and finally 28.3% & 26.7% of the respondents
satisfied & highly satisfied about net banking facilities in SBI after the merger.
104
ANOVA Test:
H0: There is no significant difference between the monthly Income and Customer satisfaction level in SBI after the merger.
H1: There is a significant difference between the monthly Income and Customer satisfaction level in SBI after the merger
Table No: 4.83TECHNOLOGY IMPACT DURING PRE MERGER VERSUS POST MERGER SBI AND ITS ASSOCIATE BANKS
Monthly Income with Customer Satisfaction on technology variables analysis are as follows;
ANOVA
Sum of Mean
Customer Satisfaction df F Sig. Results
Squares Square
Between Groups 14.521 4 3.63025
After merger the quality of service Within Groups 252.366 115 2.19449 1.654 0.001 Accepted
Total 266.887 119
Bank Employee's hospitality after merger Within Groups 277.388 115 2.41207 1.965 0.012 Accepted
Total 296.351 119
The Trustworthy of After merger Within Groups 244.772 115 2.12845 1.541 0.003 Accepted
Total 257.896 119
Technical convenience Within Groups 252.54 115 2.196 1.020 0.045 Accepted
Total 261.504 119
customers Importance has Improved After Between Groups 9.351 4 1.583 1.114 0.005 Accepted
105
the merger Within Groups 244.368 115 1.421
Total 253.719 119
New policy & procedure after the merger Within Groups 213.983 115 1.86072 1.965 0.008 Accepted
Total 228.608 119
Charges for Maintain of Minimum
Within Groups 260.821 115 2.26801 1.724 0.009 Accepted
Balance
Total 276.457 119
Registration of mobile number and
Within Groups 245.023 115 2.13063 2.071 0.007 Accepted
immediate update
Total 262.677 119
Net banking service After the Merger Within Groups 245.023 115 2.13063 1.307 0.007 Accepted
Total 256.159 119
The above ANOVA table reveals that All the variables less than 5% significant level, hence it is concluded that there is significant difference
between the monthly Income and Customer satisfaction in SBI after the merger.
106
POSITIVE IMPACT OF MERGER
 Economies of scale is one of the beneficial impact, which helps the bank to carry out the administration of the banks more effectively.
 The advantages of the merger include getting economies of scale and decrease the cost of running the business.
 After the amalgamation, it can withstand the strong competition from private sector banks and can accumulate more resources to channelize
trained manpower across its branches.
 The merger of SBI and its associate banks will produce a good result in the network increase of SBI and its reach would maximize.
 Cost savings on account of treasury operations, audit, technology, etc., would lower cost-to-income ratio in the long term.
 New technologies and features by SBI will uniformly be available to all customers of SBI, its associates and subsidiaries.
 Shares of SBI and its associates will post tremendous earnings in the stock exchange thereby benefiting stakeholders.
 After the merger SBI will become the 44th largest bank in the world by assets
 The largest bank, the better is the diversification of its assets portfolio and lesser chances that the bank will fail in the system.
 The merged banks can tap into cheaper funds more easily and it will also be able to rationalize the branches all over the country, to cut down
the operation costs.
 As of now SBI alone has an employee strength of more than 2 lakhs, combining with all these banks it will cross 3 lakh base and that is huge
terms of employment.
 With this merger, SBI will be able to finance more and more mammoth projects that will lead to the economic development of the country.
107
 SBI's reach and network will multiply, efficiency will likely to increase with the rationalization of branches.
 Adoption of the development of technologies in associate banks will be faster.
 Gross NPA and Net NPA of the combined entity will come down.
 Capital adequacy will improve requiring less capital infusion by government
NEGATIVE IMPACT OF MERGER
 Immediate negative impact would be from pension liability provisions (due to different employee benefit structures) and harmonization of
accounting policies for NPA (non-performing assets) recognition.
 The associate banks are on a different footing as they have regional flavor and regional focus compared to nationalistic SBI culture.
 Various internal conflicts and disputes may arise concerning promotion, pension, and other potential issues.
 Post-merger, SBI's employee costs rose by Rs. 23 crore a month.
 There are currently 550 SBI offices while its associate banks have 259. The target for the number of controlling offices after the merger is
687 -- a reduction of 122 offices
 Out of the five head offices of the associate banks, we will retain only two. Three head offices of the associate banks will be unbound along
with 27 zonal offices, 81 regional offices and 11 network offices of the associate banks. Along with the winding-up of these offices, some
merger processes will come into effect Simultaneously, including the data merger of the five entities.
108
CHAPTER-5
FINDINGS, SUGGESTIONS AND CONCLUSIONS
5.1.FINDINGS
1. State Bank of India increased its capital in 2016-17 through sales of its shares and
infusion to manage the financial situation of the bank. Due to which there is a drastic
increase in several aspect of the operations of the bank.
2. In post-merger, around 75% of share capital has reduced due to compensating on
associate bank losses, but SBI going to concentrate the capital value.
3. The reserves& surplus and the statutory reserves were increasing consistently in the
pre-merger period and started declining after merger which is analysed in Table 4.2.
4. Around 85% of the capital reserve has increased in post-merger comparing with pre-
merger duration. Capital reserve will help the bank for the future requirement in case
of any future requirements.
5. The deposit of SBI& Its associate banks was increasing 12% in pre-merger duration
but after the merger, the deposit rate has reduced to 6% at 2 years of post-merger.
6. Saving bank deposit has continually increased every year in SBI and its associates'
banks in pre and post-merger of state bank of India. It was found that there was no
change in the deposits of the bank pre & post-merger.
7. Borrowings were reasonably increasing from 2012-13 to 2014-15, but suddenly in the
year 2015-16 it has increased by about 46% in comparison with last year, and 2016-
17 borrowings had little reduced and after merger again increasing. It was found that,
one of major reason for the increase in the borrowing in 2015-16 is the drastic
increase of NPAs.
8. Other liabilities and provisions were increasing from 2012-13 to 2015-16, but in the
year, 2016-17 have decreased 2% and after merger also it reduced by 9% and 13%
1
respectively in post-merger period. Even though it is a good sign it was found that the
provisions are to be increased to cater the needs of the NPA and other bad debts.
9. Bills payable was fluctuating in pre-merger duration but after the merger, the bills
payable was reducing at 10% and 14% in the two years after the merger respectively.
It can be understood that the consolidation process reduces the Bills payables after the
merger.
10. Cash in hand was decreasing a couple of years in pre-merger duration but in post-
merger, the cash was increasing at 5% and 21% respective years. After merger SBI
started maintaining the cash in hand for the liquidity requirements of the bank.
11. The balance maintained in RBI in pre-merger duration was increasing year by year,
even though it reduced in the first year after merger due to the consolidation process,
it has picked up in the second year and got stabilised.
12. The 2nd year of post-merger (Rs.93964.77 Crore) around 9% of the investment value
reduced by state bank of India.
13. Interest from others also reduced after the merger around 6% & 15% reduced
respective post-merger years because the inter-bank funds have reduced in pre-merger
that funds have to be compensated on the post-merger.
14. The total advances and term loans issued are consistently increasing at 8% in pre-
merger and post-merger duration. It is understood that the operations of the bank did
not get affected, and it maintains the operating profit at the same pace in both pre and
post-merger period.
15. The total fixed assets value has reduced in post-merger duration upto 20% in the first
year and the status improved in the second year after the merger.
2
16. The result of correlation test regarding the fixed assets and its depreciation rate,
reveals that there is no significant relationship between increase in fixed assets, and
the increase the depreciation rate.
17. In post-merger, the interest on RBI balance & other inter-bank funds has reduced
around 6%, 47% in the respective years after the merger.
18. . In post-merger, the other interest earned has reduced to 5% & 14% in the respective
years after the merger.
19. The total other income was increasing with 21% in the pre-merger duration, but after
the merger, the income was increasing by 4% and in the following next year it has
reduced by 18% in post-merger duration.
20. The income on commission, exchange, and brokerage were increasing with an
average of 8% in both pre and post-merger duration.
21. In the second year of post-merger, the profit has reduced by 77%. It can be
understood that the process of consolidation after merger has affected the profit of the
bank.
22. After the merger the SBI paying more interest compared with 1st year of merger 2nd
year, it was increasing around 85% of the previous year (2017-18), the reason may
23. The total operating expenses were increasing averagely 12% in both pre and around
16% post-merger duration.
24. After merger provisions and contingencies have increased around 57%, but the 2 nd
year of merger around 13% reduced comparatively 1st year of post-merger.
25. There was no impact of merger on the miscellaneous income of the bank. It is in the
increasing trend even after the merger.
3
26. In case of the independent sample test to understand the consistency of operating
profit, P-value 0.089 is higher than the standard value at a 5% level; it denotes the null
hypothesis as accepted. Hence the operating profit is not consistent between pre and
post-merger.
27. In case of the independent sample test conducted to understand the consistency of net
hypothesis as accepted. Hence there is no consistent increase of net profit before and
after merger.
28. Out of 120 respondents 103 respondents are well educated alike Under graduate, Post
Graduate and Ph.D also. Most of 55% of the respondents were using bank accounts in
subsidiary banks by Private and Government employee’s only.
29. According to the ANOVA test, all the customer satisfaction variables are significant
with monthly Income of the customers. Majority of the customers are felt happy
regarding the merger.
5.2.SUGGESTIONS
1. It is suggested that the capital reserve to be maintained consistently to protect the
interest of the shareholders and also as a safety measure for any future capital losses
or sudden withdrawal of deposits by the account holders for any reason.
2. As per the findings it can be understood that the other liabilities & provisions are
decreased by 9%after the merger. This decreasing trend of other liabilities and
provisions will help maximize the profit of the bank and in turn benefit the
shareholders and the management of the bank.
3. Reserves & surplus and the statutory reserves were increasing consistently in the pre-
merger period and started declining after merger. It is suggested that there is a need
for efforts to increase the reserves and surplus in the coming years.
4
4. After the merger around 7.6% of balance maintaining at RBI reduced by the State
Bank of India in 2017-18 and again increased in 2018-19. It is suggested that SBI
needs to maintain the balance with reference to the RBI standard to maintain CRR &
SLR.
5. The value of the fixed assets reduced up to 20%, because of the consolidation and
valuation process after merger. It is suggested that the bank need to increase the fixed
assets. In general, higher the fixed assets will help to achieve higher business or sales
in an organisation.
6. The earning of interest/discount earned on advances/bills was reduced by around 8%
compared with pre-merger, SBI needs to concentrate the increase the earnings for the
upcoming years as it is a necessary requirement for increasing the profit.
7. In post-merger, the interest has reduced around 6% from 2016-17 to 2017-18, again it
has reduced by 47% in the year 2018-19 because the inter-bank funds have reduced. It
is suggested that the bank need to increase the balance with RBI and Inter-bank funds
to increase the interest from this source.
8. In the second year of post-merger, the total income has reduced by 18% as per the
findings on the analysis of total income after merger. It is strongly suggested that the
bank need to make efforts to improve the total income of the bank to avoid
profitability issues which may lead to other consequences.
9. Investments in various avenues reduced after merger, which would reduce the income
level and the stability of the bank. It is suggested that the bank need to put efforts for
increasing the investment in all possible portfolios.
10. After the merger, SBI needs to reduce the other kind of interest or discount paid to all
borrowings from the financial institution. It includes administrative expenses, selling
and distribution expenses, director fees and other indirect expenses.
5
11. The net profit of the bank got reduced in the last financial year due to the merger and
it is more negative too. If the same is been continued in the future then it may affect
the share value of the bank and also the investors. So it is suggested that the remedial
measures are to be taken to increase the net profit of the bank in the next financial
year.
12. The study also revealed that the stability of the bank is also questionable after the
merger as the ratios show an instability with the operations of the banks. For this
purpose, the bank can look after the NPA (Non-Performing Asset) to reduce the
instability at the earliest.
13. Strict measures are to be taken for recovering the loans and interest of loans to be
received from the customers. Within the scope of the government regulations,
stringent actions to be taken on the defaulters. Banks branches are to be made
responsible for the NPAs.
14. SBI has separate branches for loans in major cities in India. Likewise it is even
profitable to have an exclusive divisions/braches for controlling NPAs. Because of the
workload of employees of the SBI regular branches, the employees are not able to
concentrate on NPAs and due to this reason the NPAs are on the increasing trend.
15. Strict actions are to be taken at all levels on the irregularities on the documentations
and unauthorised approvals, loans given above the sealing and favouring for personal
advantages and other fraudulent activities.
16. The branch managers are to be empowered and made accountable for the recovery of
the loans and advances issued and they should also be supported for taking action
against the defaulters within the regulations of RBI and the Government.
6
5.3.CONCLUSION
After the merger, the financial performance of the State bank of India is growing and most of
the expenses have reduced as the operations of the bank executed with economies of scale.
The merger was beneficial for enlarging the capital of the state bank of India, and the
associate’s bank's loss is compensated with the help of the merger. Associates Banks
customers are included in the state bank of India and considered on par with the customers of
SBI. The profitability performance of the bank after the merger going good. Depositors and
investors are getting good interest and returns, and the interest rates also reduced for various
loans and advances provided to their customers.
Merger is an advantageous tool for expansion and growth of the state bank of India. It was
helpful for the survival of weak associate banks by merging into a state bank of India. The
researcher took this analysis to find the success level of the merger, and the progress of the
bank in terms of the performances at all directions and levels comparing the status during pre
and post-merger. Net profit of the bank has reduced in the two years after merger as the bank
is in the process of consolidation and settle the issues of all the associate banks.
Still the position of the bank has not been stabilised with reference to NPAs. Efforts are being
made to reduce the NPAs of all the banks through various methods. Researcher also
suggested measures for reducing NPAs of SBI. Implementation of such measures would
reduce the NPAs and improve the status of the bank in terms of its profitability and other
performances. So the bank has to make efforts to stabilise its operations by considering the
suggestions given by the researcher to increase the share value of the bank and improve the
status of SBI the largest bank in India.
7
5.4. SCOPE FOR FUTURE RESEARCH
Before the merger, the associate banks are running under the loss, so compensate this after
the merger of State bank of India & its associate banks financial aspects and the various
strategy has adopted to overcome the financial crisis. This research has made only the
financial perspective based on current situations.
This research has been conducted with limitation of financial perspective only, but in future
it may be carried out on other performance alike, Administration, Human Resources,
Operations management, Customer relationship management, and Marketing Management,
etc.
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
8
I
Bibliography
 Aharon, David & Gavious, Ilanit & Yosef, Rami. (2010). Stock market bubble effects
on mergers and acquisitions. The Quarterly Review of Economics and Finance. 50.
456-470.
 Ahmed, M., and Ahmed, Z. (2014). Mergers and acquisitions: Effect on financial
performance of manufacturing companies of Pakistan. Middle-East Journal of
Scientific Research, 21(4): 689-699
 Amir, Javid, (2013). Impact of merger and acquisition on operating performance and
shareholder wealth in Pakistan banking sector, Interdisciplinary Journal
Contemporary Research in Business, 5(2361).
 Anand Manoj and Singh Jagandeep (2008) ‘Impact of Merger Announcements on
Shareholders’ Wealth Evidence from Indian Private Sector’, Volume 33 Pages: 360-
383.
 Antony Akhil, K. (2011), “Post-Merger Profitability of Selected Banks in India,”
International Journal of Research in Commerce, Economics and Management, Vol. 1,
No. 8, (December), pp. 133-5.
 Azeem Ahmed Khan (2011), “Mergers and Acquisitions in Indian Banking Sector in
Post Liberalisation Regime”, International Journal of Contemporary Business Studies
Vol 2, No: 11 November 2011
 Barinder Singh (2017) , Financial Analysis of SBI: a study with special reference to
Indian Banking Industry, International Journal of Contemporary Research and
Review, Vol. 8, Issue. 7, Page no: ME 20271-20278
 Bello YA (2005) Banking system consolidation in Nigeria and some regional
experiences: Challenges and prospects. Bullion Publication of the Central Bank of
Nigeria.
2
 Bharat Khurana (2017), analysis of merger of SBI& its associates,
Http://www.granthaalayah.com ©International Journal of Research – granthaalayah,
Vol.5 (Iss.5): May, 2017.
 CMA Jai Bansal and Dr. Gurudatt Kakkar (2018) A Research on The Analysis of
Merger of SBI With Its 5 Associate Banks and Bhartiya Mahila Bank, International
Journal of Science Technology and Management, Volume-7, Issue-12, pp: 1-8.
 Daniya, A. A., Onotu, S., and Abdulrahaman, Y. (2016). Impact of Merger and
Acquisitions on the Financial Performance of Deposit Money Banks in Nigeria.
Arabian Journal of Business and Management Review, 6(4): 1-5.
 Das, S. (2014). Performance Mantra of the Regional Rural Banks: An Evaluation
between the Pre-merger and Post-merger Era. Jindal Journal of Business Research,
3(1-2): 14-28.
 Demirbag, M., Ng, C. K., and Tatoglu, E. (2007). Performance of mergers and
acquisitions in the pharmaceutical industry: a comparative perspective. Multinational
Business Review, 15(2): 41-62.
 Devarajappa S, IRJC (2012), “Mergers in Indian Banks: A Study on Mergers of
HDFC Bank Ltd and Centurion Bank of Punjab Ltd”, International Journal of
Marketing, Financial Services & Management Research, Vol. 1 Issue 9, September
2012 .
 Devarajappa, S. (2012). Mergers in Indian Banks: A Study on Mergers of HDFC
Bank Ltd and Centurion Bank of Punjab Ltd. International Journal of Marketing,
Financial Services & Management Research,1(9): 33-42.
 Dobre, F., Brad, L., Ciobanu, R., Turlea, E., and Caloian, F. (2012). Management
performance audit in mergers and acquisitions. ProcediaEconomics and Finance, 3:
309-314.
3
 Dr Jyoti Singhal1 (2017),“Consolidation/ Mergers And Acquisitions Of Banking
Sector For Profitability And Efficiency”, Gian Jyoti e-journal, Volume 7, Issue 3,pp-
39-51
 Dr. (Mrs.) Prashanta Athma, A. Bhavani, Mergers in Banking Sector in India: An
Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668
PP 07-16 www.iosrjournals.org
 Dr. Jayashree R Kotnal (2016) The economic impact of merger and acquisition on
profitability of SBI, International Journal of Applied Research, volume-2, issue-7,
pp: 810-818
 Dr. Veena K.P & Prof. S.N. Patti, financial performance analysis of pre and post-
merger in banking sector: a study with reference to ICICI bank LTD, International
Journal of Management (IJM) Volume 7, Issue 7, November–December 2016,
pp.240–249.
 Dr.Prashanta Athma & A. Bhavani (2016) Mergers in Banking Sector in India: An
Business and Management, PP 07-16.
 Duggal, N. (2015). Post-merger performance of acquiring firms: A case study on
Indian pharmaceutical industry. International Journal of Research in Management and
Business Studies, 2(3): 24-28.
 Dutta, M.M., and Dawn, S.K. (2012). An Analysis: Mergers and Acquisitions in
Indian Banks after Liberalization: https://www.semanticscholar.org/paper/Mergers-
and Acquisitions in-Indian-Banks-after-An-Dutta
Dawn/b2f3f24d78da652c74efae448f 55c71 be0ba6f8 a#citing-papers
4
 Fakarudin, (2014). Effects of Mergers and Acquisitions on Revenue Efficiency and
the Potential Determinants: Evidence from Malaysian Banks, Journal of Social
Science and Humanities, ISSN: 0128-7702, 22 (S): pp. 55 – 76.
 Feroz, E. H., Kim, S., and Raab, R. (2005). Performance measurement in corporate
governance: do mergers improve managerial performance in the post-merger period?.
Review of Accounting and Finance, 4(3): 86-100.
 Ghosh, M. S., and Dutta, S. (2014). Mergers and acquisitions: A strategic tool for
restructuring in the Indian telecom sector, Procedia Economics and Finance, Volume-
11: 396-409.
 Goyal, K.A. (2012). Merger and Acquisition in banking industry: A case study of
ICICI bank Ltd, International Journal of Research in Management, ISSN 2249-5908,
2(2)
 Gupta, K., 2015, „Mergers and Acquisitions in the Indian Banking Sector: A Study of
Selected Banks‟, International Journal of Advanced Research in Management and
Social Sciences 4(3), 94-107.
 Gurbaksh Singh & Sunil Gupta, an impact of mergers and acquisitions on
Volume 4, Issue 9 (September, 2015) PP 33-48.
 Gurbaksh Singh and Sunil Gupta (2015) An impact of mergers and acquisitions on
Volume-, Issue-9, pp 33-48.
5
 HONEY GUPTA (2016), pre and post-merger financial performance analysis of state
bank of India, zenith international journal of multidisciplinary research, vol.6 (10),
october (2016), pp. 1-8.
 Honey Gupta 2016, Pre and Post Merger Financial Performance Analysis of State
Bank of India, ZENITH International Journal of Multidisciplinary Research, Volume-
6, Issue-10, pp. 1-8.
 Islam M.D and Sengupta P.P (2012), ―The Behavioural Aspect of Mergers and
Acquisitions: A Case Study from India, Global Journal of Business Research, Vol.6,
No.3, pp. 103-112.
 Jayaraman, A. R., Srinivasan, M. R., and Arunachalam, R. (2014). Impact of merger
and acquisition on the efficiency of Indian banks: a prepost analysis using data
envelopment analysis. International Journal ofFinancial Services Management, 7(1):
1-18.
 Jeelanbasha, V. & Arun, S.S., 2016, „Financial Performance Analysis of Post-Merger
and Acquisition (A Case Study of ICICI Bank)‟, International Journal of Business
and Administration Research Review 1(1), 209-213.
 Joshi V and Goyal K.A (2012), ―Mergers in Banking Industry of India: Some
Emerging Issues, Asian Journal of Business and Management Sciences, Vol.1, No.2,
pp. 157-165.
 Kemal, M. U. (2011). Post-merger profitability: A case of Royal Bank of Scotland
(RBS). International Journal of Business and Social Science, 2(5): pp157-162.
 Khan, AzeemAhmad (2011), “Merger and Acquisitions (M & As) in the Indian
banking sector in post liberalization regime”, International journal of contemporary
business studies, Vol.II, No. XI, November, pp.no. 31-45.
6
 Kiliç, M. (2011). Cross-border bank acquisitions and banking sector performance: an
empirical study of Turkish banking sector. Procedia- Social and Behavioral Sciences,
24, 946-959.
 Krishnadas Rajagopal , Merging associate banks with the SBI (The Hindu
Newspaper), April 27, 2018, 00:15 IST https://www.thehindu.com/opinion/op-
ed/merging-associate-banks-with-the-SBI/article23686892.ece
 Kumar, R., (2009). "Post-Merger Corporate Performance: an Indian Perspective",
Management Research News 32 (2), pp. 145-157
 Kuriakose Sony, Gireesh Kumar GS. (2009) Assessing the Strategic and Financial
Similarities of Merged Banks: Evidence from Voluntary Amalgamations in Indian
Banking Sector, Science & Socity, Volume-8, Issue-1, pp:49-62.
 Lakstutiene, A., Stankeviciene, J., Norvaisiene, R., and Narbutiene, J. (2015). The
Impact of Acquisitions on Corporate Performance Results during the Period of
Economic Slowdown: Case of Lithuania. Procedia-Social and Behavioral Sciences,
213: 455-460.
 M. Rajamani & Dr.P.R.Ramakrishnan (2015), A Study on Impact of Merger of
Centurian Bank of Punjab on the Financial Performance of HDFC Bank, IOSR
Journal Of Humanities And Social Science (IOSR-JHSS) Volume 20, Issue 5, Ver.
VI (May. 2015), PP 28-31.
 Mantravadi Pramod, Reddy A Vidyadhar. Relative Size In Mergers And Operating
Performance: Indian Experience, Economic and Political Weekly, 2007.
 Mantravadi, D. P., and Reddy, A. V. (December, 2008). Post-merger performance of
acquiring firms from different industries in India. International Research Journal of
Finance and Economics, 22: 192-204.
7
 Mehta, Jay and Ramkumar Kakani (2006), ‘Motives for Mergers and Acquisitions
inIndian Banking Sector- A Note on Opportunities and Imperatives’, Working Paper,
S.P.Jain Centre of Management, Singapore, 1-11.
 Monika (2014), “Mergers and Acquisitions in Indian Banking Sector- A Comparative
Study on Pre-post-Merger”, International Journal of Economic and Management
Strategy, Vol-4, No.-1, pp.no. 1-14.
 Muhammad Rizwan Ullah, Ahsan Ali et.al (2016) “Benefits of Mergers and
Acquisitions in Banking Industry of Pakistan: A Case Study of Five Latest
Transactions”, Journal of Poverty, Investment and Development, An International
Peer-reviewed Journal, Vol.27,pp-25-32
 Narayanaswamy, R. (2017). Financial accounting: a managerial perspective. PHI
Learning Pvt. Ltd.
 Okoye Lawrence Uchenna, Modebe, Nwanneka J.et.al (2016) “ Effect of Mergers and
Acquisitions on Banking Sector Performance in Nigeria”, Social Development NG-
Journal of Docial Development, Vol. 5, No. 5, pp-78-86
 Parveen Kumari (2014) “Mergers and Acquisitions in Indian Banking Sector- A
Strategic Approach”, Global Journal of Finance and Management, Vol. 6, No. 3, pp-
217-222.
 Patel, R. J., and Patel, M. K. (2015). Does Merger Be Prolific? A Study of Selected
Indian Banks. International Journal of Applied Financial Management Perspectives, 4
(3): 1965-1970.
 Patel, R., and Shah, D. (2016). Mergers and Acquisitions -The Game of Profit and
Loss: A Study of Indian Banking Sector. Researchers World, 7(3):92-100.
8
 Radha Naga Sai, V. and Syed Tabassum Sultana.(2013). Financial Performance
Analysis In Banking Sector – A Pre & Post Merger Perspective. International
Monthly Refereed Journal of Research In Management & Technology, 2(1): 56-66
 Ramakrishnan, K. (2008). Long-term post-merger performance of firms in India.
Vikalpa, 33(2): 47-64.
 Ramakrishnan, K. (2010). Mergers in Indian industry: performance and impacting
factors. Business Strategy Series, 11(4): 261-268.
 Rani, N., Yadav, S. S., and Jain, P. K. (2015). Financial performance analysis of
mergers and acquisitions: evidence from India. International Journal of Commerce
and Management, 25(4): 402-423.
 Ritesh Patel(2017)Pre & Post-Merger Financial Performance: An Indian Perspective,
Journal of Central Banking Theory and Practice, 2018, 3, pp. 181-200.
 Sanda M.A and Benin P.A (2011), ―How is the Firm Dealing with the Merger? A
Study of Employee Satisfaction with the Change Process, Journal of Management
and Strategy, Vol.2, No.2, pp. 28-37.
 Sanjay Sharma, Sahil sidana, impact of SBI merger on financial condition of SBI,
international conference on “ Recent Trends in Techonology and its Impact on
Economy of Indian” Guru Nanak College for Girls, Sri mukstar Sahib, Punjab
(India), PP 390-396.
 Sanjay, Tiwari, (2011). Mergers of banks some issues and challenges us,
International Journal of Multidisciplinary Research, 2231 5780, 1(4).
 Saxena C.R and Bhargava I (2012), ―Employee Morale an Indicator of Success or
Failure of an Organization, Bauddhik, Vol.3, No.2, pp. 16-22.
 Shanmugam, B., and Nair, M. (2004). Mergers and acquisitions of banks in Malaysia.
Managerial Finance, 30(4): 1-18.
9
 Singh, G. & Gupta, S., 2015, An Impact of Mergers and Acquisitions on Productivity
and Profitability of Consolidation Banking Sector in India, Abhinav International
Monthly Refereed Journal of Research in Management & Technology 4(9), 33-48.
 Sinha, Pankaj and Gupta, Sushant (2011) Mergers and Acquisitions: A pre-post
analysis for the Indian financial services sector,Munich Personal Repec Archive, pp:1-
37
 Sohini Ghosh, Sraboni Dutta (2015), “Mergers and Acquisitions in Indian Banking
Sector: Pre-Post Analysis of Performance Parameters” IOSR Journal of Business and
Management (IOSR-JBM), Volume 17, Issue 3.Ver. II (Mar. 2015), PP 01-09
 Tamragundi, A.N. (2016). Impact of mergers on Indian banking sector: A
comparative study of public and private sector merged banks. International Journal of
Research in Management, Social Sciences & Technology, ISSN 2320 – 2939, 2320-
2793 (Online).
Books and books sections
 V G Chari , Bank Mergers and Acquisitions ,SSIM-Excel Series, PP.57-105.
 M Prakash, Bhargavi V R, Banking Regulation and Operations, Vision Book
House , PP.151-202
 Sheeba Kapil and Kanwar Kapil, Mergers and Acquisitions: Valuation,
Leveraged Buyouts and Financing, Wiley Publication,PP.205-275.
 Kraftil, Master Guide to Mergers and Acquisition in India Tax and
Regulatory, Wolters Kluwer Publication, PP.205-279.
 Ravi M. Kishore,Strategic Financial Management, Taxman’s Publication,
PP.805-861.
10
 S.P Gupta, Statistical Methods, Sulthan Chand publication, PP.378-456.
 K Ramachandra,Quantitative Analysis for business Decisions, Himalaya
publication, PP.105-176.
 J K Sharma, Operations Research, Machmillan publications, PP.103-230.
 Ravindhara vedapalli, Mergers and Acquistions, Excel Publication, PP. 116-
167.
 Sudi Sudrashanam, Creating value from Mergers and Acqusitions, Persona
Education, PP.217-264.
 Gary A Dumski, The Bank Merger Wave, Routledge Publisher, PP. 111-123.
 S. Davis, Bank Merger Lessons for Future, Palgrave Macmillian, PP. 73-86.
 John H Boyd And Stanely L Grafiam, Bank Mergers and Acquistions, Stern
Publication, PP. 113-121.
 Gup Benton E, Bank Mergers: Current Issues And Perspectives, Springer
 K. Ramachandra, Quantitative Analysis for business Decisions, Himalaya
 S.P Gupta, Statistical Methods, Sulthan chand publication, PP. 378-456.
 Walpone, Myers, Ye, Probability and Statistics, Person Education , PP. 110-
135.
 Gerry Johnson, Kevan Scholes and Patrick Regner, Exploring Strategy text
and cases , Person Education, PP. 371-462.
 Maureen Burton, Bruce Brown, Financial System of the Economy: Principles
of Money and Banking, Routledge London and New Yark publisher,
PP. 181-210.
11
Website URLs
 www.rbi.gov.in
 https://en.wikipedia.org/wiki/state_bank_of_Saurashtra.
 https://www.toppr.com/guides/general-awareness/banking/state-bank-of-india-and-its-
associate-banks
 https://www.SBI.co.in
 https://en.wikipedia.org/wiki/State_Bank_of_India
 https://economictimes.indiatimes.com/industry/banking/finance/banking/five-
associate-banks-to-merge-with-SBI-from-april-
1/articleshow/57314900.cms?from=mdr
 https://economictimes.indiatimes.com
 https://www.moneycontrol.com/india/stockpricequote/banks-public-
sector/statebankindia/SBI
 http://www.moneycontrol.com/download-annual-
report/statebankofmysore/SBM/2016
 http://www.moneycontrol.com/download-annual-
report/statebankofbikanerandjaipur/SBB02/2017?classic=true
 https://www.moneycontrol.com/news/tags/state-bank-of-hyderabad.html
 https://www.moneycontrol.com/news/tags/state-bank-of-patiala.html
 https://www.moneycontrol.com/download-annualreport/statebanktravancore/sbt/2016
12
Appendix– 1
The below table shows data collected from respective bank and consolidated
from year wise of each bank during pre- merger
STATE BANK OF BIKANER & JAIPUR
Particulars
2016-17 2015-16 2014-15 2013-14 2012-13
Liabilities
1. Capital 70.00 70.00 70.00 70.00 70.00
2. Reserves and Surplus 6282.00 6672.80 5942.68 5285.92 4694.14
Statutory Reserves 2200.21 2200.21 1945.03 1711.97 1492.46
Capital Reserves 187.07 98.79 83.88 73.38 59.07
Share Premium 866.64 866.64 866.64 866.64 866.64
Investments Fluctuations Reserves 5.33 5.33 5.33 - -
Revenue and other Reserves 3022.74 3501.82 3041.79 2633.93 2275.96
Balance of Profit - 0.00 0.00 0.00 0.00
3. Deposits 104008.73 94004.85 84239.27 73874.73 72116.22
Demand deposits 5777.85 5058.37 4187.58 4130.97 4430.04
From banks 325.01 237.62 256.57 263.78 287.91
From others 5452.84 4820.75 3931.01 3867.20 4142.13
Savings bank deposits 41685.62 31322.45 28538.66 25058.06 21443.41
2. Term deposits 56545.25 57624.03 51513.03 44685.69 46242.78
From banks 22.09 447.73 745.72 678.44 613.78
From others 56523.17 57176.30 50767.31 44007.25 45629.00
Deposits of branches in India 104008.73 94004.85 84239.27 73874.73 72116.22
Deposits of branches outside India - - - - -
4. Borrowings 1553.75 4888.36 7573.39 6706.36 5842.03
Borrowings in India 1287.87 3940.91 6298.39 6167.12 5136.32
From Reserve Bank of India - - - - -
From other banks - 1900.00 1600.00 800.00 2099.61
From other institutions and agencies 1287.87 2040.91 4698.39 5367.12 3036.71
Borrowings outside India 265.89 947.45 1275.00 539.24 705.71
Secured borrowing - 1900.00 4392.14 3903.29 2937.47
5. Other liabilities & provisions 4378.86 4652.08 4476.20 4939.97 3294.44
Bills Payable 969.67 1250.53 1215.67 1199.79 1139.04
Inter-office adjustments - - 72.27 775.68 -
Interest accrued 443.02 815.49 783.83 730.20 771.78
Subordinate debt - - - - -
Deferred Tax Liabilities - 116.15 86.65 32.58 -
Others (including provisions) 2966.17 2469.91 2317.78 2201.71 1383.62
B. Assets
Cash in hand 679.21 502.55 558.05 432.77 353.00
Balances with RBI 7917.45 9212.63 7229.15 6313.63 5802.86
1
Balances with banks in India 1.06 1.12 1.13 114.76 30.85
Money at call and short notice 2000.00 - - - -
Balances with banks outside India 1.44 106.55 148.53 145.51 149.89
Investments 34922.37 24734.18 22138.62 17750.28 20145.88
Investments in India 34922.37 24734.18 22138.62 17750.28 20145.88
Government securities 32413.92 22650.98 20632.26 16527.64 17673.38
Other approved securities 0.13 0.13 - - 4.93
Shares 252.42 143.61 134.44 119.79 160.17
Debentures and Bonds 747.67 1290.42 448.61 476.61 59.80
Subsidiaries and/or joint ventures 56.40 56.40 56.40 56.40 37.23
Others 1451.83 592.64 866.91 569.84 2210.38
Investments outside India - - - - -
Government securities - - - - -
Subsidiaries and/or joint ventures - - - - -
Others - - - - -
Advances 64830.01 72927.46 69548.42 64172.09 57534.97
Bills purchased and discounted 875.19 2234.47 1882.83 1868.20 1688.27
Cash credits, overdrafts & loans 34659.63 34289.50 34759.69 31291.68 26612.15
Term loans 29295.19 36403.49 32905.91 31012.22 29234.55
Secured by tangible assets 57189.13 64747.98 60427.10 54736.95 48154.57
Covered by Bank/Govt. Guarantees 190.67 200.78 1830.69 1339.90 3535.75
Unsecured 7450.21 7978.70 7290.63 8095.24 5844.65
Advances in India 64830.01 72927.46 69548.42 64172.09 57534.97
Priority sectors 28764.84 28702.71 26934.18 23130.26 20313.00
Public sectors 1247.35 2366.64 3316.26 3133.26 3353.09
Banks 8.61 0.98 0.49 650.18 240.00
Others 34809.22 41857.13 39297.50 37258.39 33628.88
Advances outside India - - - - -
Fixed Assets 1353.65 398.57 392.71 264.19 231.32
Premises 1063.83 87.64 50.09 33.52 34.89
Fixed assets under construction - 0.69 39.70 - 0.12
Other Fixed assets 289.81 310.25 302.93 230.67 196.31
Other Assets 4588.15 2405.00 2284.93 1683.74 1768.06
Inter-office adjustments (net) 755.10 8.63 - - 275.13
Tax paid 649.91 525.01 571.94 270.57 46.32
Stationery and Stamps 4.26 5.37 4.70 4.72 5.00
Others 1895.37 778.50 700.61 526.03 674.94
2
STATE BANK OF BIKANER & JAIPUR
PARTICULARS
2016-17 2015-16 2014-15 2013-14 2012-13
Interest/discount earned on
5987.73 6562.46 7120.41 7518.32 6707.33
advances/bills
Income on investments 1456.71 1550.56 1816.48 1978.4 2402.94
Interest on balances with rbi and other
22.11 30.76 49.01 37.54 21.53
inter-bank funds
Interest earned - others 31.64 24.77 19.55 58.22 21.72
Commission, exchange and brokerage 557.92 606.74 617.91 756.2 782.93
Profit (loss) on sale of investments 75.55 138.63 154.02 208.03 507.52
Profit (loss) on exchange transactions 55.2 54.78 62.09 65.16 47.13
Miscellaneous income 37.61 76.18 92.38 27.67 78.94
Interest on deposits 3838.72 4643.74 4865.4 5467.36 5908.04
Interest on RBI/ Inter - bank
79.9 93.76 283.07 415.09 203.2
borrowings
Interest expended - others 151.33 194.88 196.32 181.57 176.89
Payments to and provisions for
819.82 987.53 1295.63 1012.91 1125.99
employees
Rent, taxes and lighting 108.93 120.84 145.63 169.2 194.16
Printing and stationery 19.21 19.93 15.51 18.87 20.28
Advertisement and publicity 9.08 12.71 14.95 16.27 20.35
Depreciation on bank's property 53.82 57.15 75.55 37.47 96.46
Directors' fees, allowances and
0.38 0.59 0.5 0.26 0.51
expenses
Auditors' fees and expenses 12.92 11.08 15.18 15.29 16.71
Law charges 3.13 2.79 4 3.44 3.39
Postage, telegrams, telephones, etc 21.44 24.51 25.73 24.82 20.35
Repairs and maintenance 13.8 17.12 20.19 22.44 23.22
Insurance 47.88 57.25 83.05 90.62 102.78
Other expenditure 220.35 267.72 309.53 352.12 432.16
3
STATE BANK OF HYDERABAD
Particulars
2016-17 2015-16 2014-15 2013-14 2012-13
Liabilities
1. Capital 20.75 20.75 20.75 20.75 20.75
Share Premium 346.50 346.50 346.50 346.50 346.50
Investments Fluctuations Reserves 37.67 37.67 37.67 8.65 8.65
Balance of Profit 0.00 0.00 0.00 0.00 0.00
3. Deposits 141898.93 137174.07 130166.19 119509.70 113324.26
Demand deposits 15380.08 12525.81 12231.19 10088.31 9538.04
From banks 602.90 411.09 426.34 464.58 485.53
From others 14777.19 12114.72 11804.85 9623.73 9052.50
2. Term deposits 80341.16 88356.22 86936.27 82681.94 80614.73
From banks 300.02 485.42 401.35 691.26 753.90
From others 80041.14 87870.80 86534.92 81990.68 79860.83
4. Borrowings 5619.05 8874.53 8502.45 6336.39 5448.42
From Reserve Bank of India - - 124.00 750.00 -
From other banks 378.00 300.00 - - -
Secured borrowing - - - - -
Bills Payable 1807.36 1532.13 1423.82 1131.14 1435.86
Inter-office adjustments - - - - -
Deferred Tax Liabilities - 84.45 73.94 223.46 -
B. Assets
Cash in hand 672.53 519.18 588.00 626.03 510.19
4
Money at call and short notice 21407.69 700.64 1415.49 100.49 700.00
Investments 43628.77 38007.60 36491.15 34266.96 33967.98
Other approved securities - - - - -
Shares 485.08 343.14 218.77 251.95 280.03
Others 1552.85 1750.80 2371.61 1148.03 1318.12
Others - - - - -
Advances 79375.57 111065.35 105053.13 95653.80 89856.51
Term loans 46257.52 61641.60 55113.90 53937.12 49742.91
Unsecured 6853.12 8483.48 10400.70 6340.19 10917.72
Public sectors 3139.11 5988.89 7603.75 5876.62 6031.78
Banks 0.50 70.51 301.37 302.11 3.00
Others 40779.47 63170.49 59513.42 55924.01 53521.18
Fixed Assets 1662.33 685.96 638.17 519.90 472.47
Premises 1187.91 198.97 200.32 151.33 126.68
Fixed assets under construction 18.40 19.33 15.58 14.44 34.70
Other Assets 9740.61 7012.79 4906.15 4163.53 3985.53
Inter-office adjustments (net) 3752.03 2527.94 2236.72 871.86 821.95
Tax paid 1226.27 1240.85 744.38 782.20 706.84
Others 3488.24 3067.64 655.78 1158.94 1294.98
5
PARTICULARS STATE BANK OF HYDERABAD
2016-17 2015-16 2014-15 2013-14 2012-13
Interest/discount earned on 9555.83 10395.74 10959.24 11092.69 9631.44
advances/bills
Interest on balances with rbi and other 193.38 172.06 92.19 59.35 224.81
inter-bank funds
Interest on RBI/ Inter - bank borrowings 49.73 28.55 157.08 103.58 92.01
Payments to and provisions for 1151.3 1415.46 1519.72 1745.89 1596.15

employees
Directors' fees, allowances and 0.17 0.26 0.07 0.14 0.19

expenses
Law charges 3.04 3.08 5.45 6.03 5.94
Insurance 87.13 120.33 150.28 140.83 139.64
6
STATE BANK OF INDIA
Particulars
2016-17 2015-16 2014-15 2013-14 2012-13
Liabilities
1. Capital 797.35 776.28 746.57 746.57 684.03
Share Premium 55423.23 49769.48 41444.69 41444.69 31501.20
Investments Fluctuations Reserves - - - - -
Balance of Profit 0.32 0.32 0.32 0.32 0.34
3. Deposits 2044751.39 1730722.44 1576793.25 1394408.50 1202739.57
Demand deposits 152421.11 139807.03 124572.30 113232.47 112680.27
From banks 5507.44 5735.59 5941.51 6041.39 7345.35
From others 146913.67 134071.45 118630.79 107191.08 105334.92
2. Term deposits 1133368.90 993169.34 924888.12 796008.10 663676.18
From banks 19561.06 6818.60 9179.87 34117.68 27855.66
From others 1113807.85 986350.75 915708.26 761890.41 635820.52
Deposits of branches outside India 91451.31 94297.85 89556.92 88424.56 72602.97
4. Borrowings 317693.66 323344.59 205150.29 183130.88 169182.71
From Reserve Bank of India 5000.00 99154.00 2595.00 12200.00 14476.16
From other banks 1475.00 - 674.52 1121.44 5648.85
Secured borrowing 77576.27 107200.78 4581.97 3339.91 5244.21
Bills Payable 26666.84 18438.46 20184.70 19165.70 19686.48
Inter-office adjustments 35645.54 36843.47 39061.19 1502.58 16384.11
Deferred Tax Liabilities 2989.77 2684.96 2353.12 3351.52 628.92
B. Assets
Cash in hand 12030.31 15080.92 14943.22 12456.56 11552.19
7
Money at call and short notice 16520.93 12457.02 15672.99 20993.49 15166.00
Investments 765989.63 575651.78 481758.75 398799.57 350877.51
Shares 5445.70 3743.81 4336.49 3009.16 3865.82
Others 72363.64 23022.79 31286.82 30557.64 32508.88
Investments outside India 41730.73 39436.71 30357.02 24259.64 20884.59
Others 30265.96 26875.04 22413.00 18610.78 16421.80
Advances 1571078.38 1463700.42 1300026.39 1209828.72 1045616.55
Term loans 892064.18 779897.38 665844.05 609212.76 491496.86
Unsecured 282886.13 315779.06 259109.62 199057.88 181561.88
Public sectors 121630.63 144401.91 99444.51 74172.45 54670.17
Banks 1404.45 1473.75 261.95 99.99 68.77
Others 823349.19 725604.44 678592.57 642792.40 559156.10
Advances outside India 283436.62 263668.82 232775.02 211944.39 167407.62
Fixed Assets 42918.92 10389.28 9329.16 8002.16 7005.02
Premises 35072.55 3143.50 2972.06 2090.86 1874.56
Other Assets 154007.72 140408.41 102209.71 43568.21 47892.03
Inter-office adjustments (net) - - - - -
Tax paid 8814.18 12698.29 9257.46 11880.51 5333.67
Others 126443.86 111379.49 77827.15 18154.75 30369.89
8
PARTICULARS STATE BANK OF INDIA
2016-17 2015-16 2014-15 2013-14 2012-13
90537.1 102484.1 112343.9 115666 119510
advances/bills
545.14 409.31 505.12 621.07 1753.47
inter-bank funds
Interest on RBI/ Inter - bank borrowings 3885.64 4124.11 5150.79 3972.04 4154.3
16974.04 18380.9 22504.28 23537.07 25113.82
employees
Directors' fees, allowances and expenses 0.48 0.73 1.09 0.61 0.63
Auditors' fees and expenses 128.5 124.63 168.34 179 197.04
Law charges 117.29 133.91 192.55 191.62 179.5
Repairs and maintenance 373.3 393.53 434 545.07 598.08
Insurance 963.46 1200.72 1468.44 1594.36 1718.04
9
STATE BANK OF MYSORE
Particulars
2016-17 2015-16 2014-15 2013-14 2012-13
Liabilities
1. Capital 48.01 48.01 48.01 48.01 46.80
Share Premium 694.35 694.35 694.35 694.35 630.54
Balance of Profit -2062.21 0.00 0.00 0.00 0.00
3. Deposits 78474.22 70568.29 66063.76 61560.32 56969.04
Demand deposits 4784.51 3711.09 3707.19 3369.41 2856.91
From banks 634.33 200.93 425.34 228.66 190.39
From others 4150.19 3510.16 3281.86 3140.75 2666.51
2. Term deposits 47158.58 46061.15 43693.83 41021.31 38996.72
From banks 71.75 124.36 581.03 249.21 70.25
From others 47086.83 45936.79 43112.81 40772.10 38926.47
4. Borrowings 2648.52 4294.75 5688.35 5473.97 3854.20
From Reserve Bank of India - 838.00 755.00 1275.00 280.00
From other banks - 199.91 449.36 - -
Borrowings outside India - 662.55 625.00 569.19 325.71
Secured borrowing 348.52 694.29 2208.99 2304.77 1923.49
Bills Payable 588.69 413.67 476.66 356.70 371.53
Inter-office adjustments - - - - -
Deferred Tax Liabilities - - - - -
B. Assets
Cash in hand 430.76 388.24 436.71 253.74 245.06
Balances with banks in India 18864.33 -0.18 10.59 18.48 21.83
10
Money at call and short notice - - 350.00 - 958.14
Investments 23861.62 20123.96 18066.00 19190.20 16774.58
Shares 137.36 51.19 42.30 37.34 77.13
Others 754.13 818.93 808.31 2860.51 2004.46
Others - - - - -
Advances 34474.63 53954.18 52025.86 49481.95 44932.57
Term loans 19419.72 30666.01 29807.44 27333.84 25480.41
Unsecured 3925.81 5539.72 5004.48 5282.56 4707.36
Public sectors 2392.47 5127.32 4314.48 3895.29 3148.30
Banks 0.03 1.92 0.26 1048.53 -
Others 18504.93 29999.07 31479.42 29650.66 28369.05
Fixed Assets 1532.58 970.91 936.59 860.32 824.28
Premises 1252.82 689.62 702.72 654.66 650.81
Fixed assets under construction 4.84 17.19 - 10.34 6.34
Other Assets 5289.69 4225.40 4184.28 1502.66 1196.57
Inter-office adjustments (net) 264.06 163.56 348.41 317.30 78.54
Tax paid 753.42 406.87 323.89 268.98 238.03
Others 3672.01 3115.07 2979.88 392.32 429.76
11
PARTICULARS STATE BANK OF MYSORE
2016-17 2015-16 2014-15 2013-14 2012-13
4787.77 4906.22 5437.1 5460.92 5010.99
advances/bills
17.52 55.45 45.94 34.86 150.95
inter-bank funds
146.11 214.6 219.74 43.29 24.37
borrowings
620.58 640.24 783.56 900.5 1047.54
employees
0.18 0.21 0.14 0.22 0.17
expenses
Auditors' fees and expenses 10.59 9.16 11.4 11.58 13
Law charges 7.69 7.34 6.26 5.96 6.38
Insurance 39.7 46.93 62.75 69.02 84.34
12
STATE BANK OF PATIALA
Particulars
2016-17 2015-16 2014-15 2013-14 2012-13
Liabilities
1. Capital 2967.61 661.53 479.51 367.85 294.75
Share Premium 3651.14 1797.22 1179.24 538.90 150.00
Investments Fluctuations Reserves - - 7.75 4.19 19.24
Balance of Profit -2035.27 - - - -
3. Deposits 100794.63 106953.66 91417.43 89673.16 88672.08
Demand deposits 4454.18 4803.81 5294.65 7402.34 3944.02
From banks 90.31 118.46 112.36 90.02 125.58
From others 4363.87 4685.35 5182.29 7312.32 3818.45
2. Term deposits 64682.58 76833.05 63885.18 61513.10 66388.08
From banks 197.35 1028.94 605.39 98.44 130.61
From others 64485.22 75804.11 63279.79 61414.66 66257.47
4. Borrowings 4071.60 7757.32 10797.02 12386.23 8840.60
From Reserve Bank of India - 500.00 - 1000.00 1114.00
From other banks - 66.26 600.00 103.12 -
Borrowings outside India - 1159.46 968.75 808.85 1250.00
Secured borrowing - - - 103.12 -
Bills Payable 688.85 557.79 450.02 419.18 510.30
Inter-office adjustments 201.15 400.56 - - -
Deferred Tax Liabilities - - 132.20 301.37 89.46
B. Assets
Cash in hand 249.13 269.39 279.53 299.18 297.83
13
Money at call and short notice 19.46 19.88 - 59.92 -
Balances with banks outside India 49.76 206.44 74.72 134.20 -
Investments 32706.11 31417.02 24455.52 24598.91 23956.66
Shares 595.00 298.08 128.73 109.83 141.40
Others 1057.13 1599.84 1628.32 2807.17 3554.11
Others - - - - -
Advances 70018.98 82185.71 78642.13 75936.56 73799.79
Term loans 34708.71 39713.20 38143.58 38633.95 37218.21
Unsecured 1806.20 1561.65 1972.71 1549.22 4025.79
Public sectors 1622.82 2684.47 2744.56 3711.87 4522.23
Banks 0.80 17.08 0.38 0.02 -
Others 39169.68 47915.36 45673.27 44812.07 46156.05
Fixed Assets 1420.45 1389.90 502.64 410.67 341.45
Premises 1080.49 1072.35 194.64 153.42 132.82
Other Assets 13367.08 11304.85 7787.84 4824.85 6385.74
Inter-office adjustments (net) - - 39.91 159.90 146.86
Tax paid 126.78 71.57 - - -
Others 12334.97 10366.97 6964.74 3921.38 5590.09
14
PARTICULARS STATE BANK OF PATIALA
2016-17 2015-16 2014-15 2013-14 2012-13
7641.9 8152.7 8216.6 8145.56 7029.95
advances/bills
186.32 173.24 67.38 84.21 112.1
inter-bank funds
51.22 120.74 119.23 96.79 435.63
borrowings
834.75 1037.02 1288.25 1280.73 1142.01
employees
0.46 0.46 0.35 0.27 0.36
expenses
Law charges 4.33 4.16 6.2 6.97 8.89
Insurance 61.99 90.7 103.44 104.7 111.5
15
STATE BANK OF TRAVANCORE
Particulars
2016-17 2015-16 2014-15 2013-14 2012-13
A. Liabilities
1. Capital 71.10 71.10 59.25 50.00 50.00
Share Premium 980.42 980.42 518.25 142.50 142.50
Balance of Profit -2310.21 6.53 6.52 3.02 1.37
3. Deposits 114688.90 101118.80 91076.94 89336.68 84623.72
Demand deposits 4407.25 3556.88 2862.41 2769.61 2650.54
From banks 166.18 294.15 285.55 257.76 276.05
From others 4241.07 3262.74 2576.87 2511.85 2374.48
2. Term deposits 73477.27 68917.98 63949.18 64634.44 62801.87
From banks 200.32 351.16 463.88 372.30 301.49
From others 73276.96 68566.81 63485.30 64262.15 62500.38
4. Borrowings 3035.00 2949.44 3796.27 6818.37 8747.16
From Reserve Bank of India - - - 790.00 -
From other banks - - 200.00 225.00 400.00
Borrowings outside India - - - 599.15 1644.84
Secured borrowing - - - - -
Bills Payable 253.80 1093.53 1117.78 1224.92 1209.86
Inter-office adjustments 495.66 175.42 637.17 12.17 -
Deferred Tax Liabilities - - - - -
B. Assets
Cash in hand 568.65 587.92 603.26 489.02 355.30
16
Money at call and short notice - 1149.65 400.00 599.15 -
Investments 40777.06 36061.83 24819.46 27941.37 27225.50
Shares 270.40 182.61 158.95 158.43 171.14
Others 4834.89 7524.59 3788.94 3688.04 3323.06
Others - - - - -
Advances 48617.57 65466.27 68720.61 69404.61 67483.62
Term loans 26882.58 35507.78 35495.76 34800.65 33579.99
Covered by Bank/Govt. Guarantees - 0.39 221.33 245.45 1289.52
Unsecured 4283.17 7600.35 8503.60 8336.96 8549.50
Public sectors 1852.50 2556.79 3772.54 3176.95 1911.34
Banks 0.00 - 0.06 - -
Others 23969.94 37355.81 39210.40 39279.74 41073.67
Fixed Assets 995.81 444.85 431.95 339.01 286.29
Premises 646.07 88.60 90.11 61.50 63.33
Fixed assets under construction 20.61 - - - -
Other Assets 5319.54 4714.15 5615.56 1941.26 1816.22
Inter-office adjustments (net) - - - - 10.50
Tax paid 555.13 540.59 652.89 371.46 293.80
Others 3883.46 3346.73 4001.13 627.47 680.92
17
PARTICULARS STATE BANK OF TRAVANCORE
2016-17 2015-16 2014-15 2013-14 2012-13
6746.1 7400.92 7278.72 6963.79 6220.88
advances/bills
Income on investments 1816.37 2224.35 2238 2454.64 2958.63
41.22 49.91 43.35 89.85 149.32
inter-bank funds
67.01 64.62 118.71 163.58 77.28
borrowings
787.82 884.76 1198.83 1188.37 1072.4
employees
0.43 0.45 0.28 0.19 0.21
expenses
Law charges 7.22 7 6.01 7.58 7.69
Insurance 61.91 68.29 100.11 113.79 117.66
18
19
Annexure: 1
Following is the Google form used for collecting the responses from customer.
PRE AND POSTMERGER FINANCIAL PERFORMANCE ANALYSIS

OF STATE BANK OF INDIA & ITS ASSOCIATE BANKS”
The survey is conducted to under standard the financial perspective to

know the technological impact of merger.
1. Gender:
1) Male 2) Female
2. Age____________
3. Educational Qualification:
1)SSLC 2) PUC
3) Under Graduate 4) Post-Graduate
5) Doctorate
4. Occupation:
1) Home Maker 2) Private Employee
3) Government Employee 4) Professional
5) Business
5. Monthly income ________
6. Please rate your valuable responses as follows in the boxes form of tick mark (√)
S.NO Particulars HDS DS N S HS

After merger the quality of
1
service
Bank Employee's behaviour
2
after merger
The Trustworthy of After
3
merger
4 Technical support
20
Customers Importance has
5
Improved After the merger
New policy & procedure
6
after the merger
Charges for Maintain of
7
Minimum Balance
Registration of mobile
8 number and immediate
update
Net banking service After
9
the Merger
21
Annexure -2
RESEARCH PUBLICATIONS
1. “PRE AND POST MERGER PROFIT ANALYSIS OF STATE BANK OF INDIA AND
ITS ASSOCIATE BANKS ”. An International Journal of Emerging Technologies and
Innovative Research. Volume 6, Issue 6, June 2019, Impact Factor: 5.878, Website: www.
jetir.org, ISSN: (2349-5162), Page number 477-486. ( UGC and ISSN Approved Journals).
2. “AN ANALYSIS ON PRE AND POST MERGER OF STATE BANK OF INDIA & ITS
ASSOCIATE BANKS ”. International Journal of Creative Research Thoughts(IJCRT) .
Volume 8 Issue 2, February 2020, Impact Factor: 7.97, Website: www. ijcrt.org, ISSN:
(2320-2882), Page number 1613-1622. ( UGC and ISSN Approved Journals).
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
22
“Pre and Post Merger Financial Performance Analysis of
State Bank of India and its Associate Banks”
Thesis submitted to the University of Mysore in fulfilment of
The requirements for the degree of
DOCTOR OF PHILOSOPHY
IN
MANAGEMENT
Submitted by
BHARATH K A
Research Scholar
Registration Number: WOF – 0637/2016-17
(Dated: 10-05-2016)
Under the Guidance of
Dr. R. SOUNDARA RAJAN

B.E.,CMA., CS., MBA., M.Phil., Ph.D.
Professor, ISBR Research Centre, Bengaluru
Department of Management, University of Mysore

Mysore
2021
CHAPTER-5
FINDINGS, SUGGESTIONS AND CONCLUSIONS
5.1.FINDINGS
1. State Bank of India increased its capital in 2016-17 through sales of its shares and
infusion to manage the financial situation of the bank. Due to which there is a drastic
increase in several aspect of the operations of the bank.
2. In post-merger, around 75% of share capital has reduced due to compensating on
associate bank losses, but SBI going to concentrate the capital value.
3. The reserves& surplus and the statutory reserves were increasing consistently in the
pre-merger period and started declining after merger which is analysed in Table 4.2.
4. Around 85% of the capital reserve has increased in post-merger comparing with pre-
merger duration. Capital reserve will help the bank for the future requirement in case
of any future requirements.
5. The deposit of SBI& Its associate banks was increasing 12% in pre-merger duration
but after the merger, the deposit rate has reduced to 6% at 2 years of post-merger.
6. Saving bank deposit has continually increased every year in SBI and its associates'
banks in pre and post-merger of state bank of India. It was found that there was no
change in the deposits of the bank pre & post-merger.
7. Borrowings were reasonably increasing from 2012-13 to 2014-15, but suddenly in the
year 2015-16 it has increased by about 46% in comparison with last year, and 2016-
17 borrowings had little reduced and after merger again increasing. It was found that,
one of major reason for the increase in the borrowing in 2015-16 is the drastic
increase of NPAs.
8. Other liabilities and provisions were increasing from 2012-13 to 2015-16, but in the
year, 2016-17 have decreased 2% and after merger also it reduced by 9% and 13%
1
respectively in post-merger period. Even though it is a good sign it was found that the
provisions are to be increased to cater the needs of the NPA and other bad debts.
9. Bills payable was fluctuating in pre-merger duration but after the merger, the bills
payable was reducing at 10% and 14% in the two years after the merger respectively.
It can be understood that the consolidation process reduces the Bills payables after the
merger.
10. Cash in hand was decreasing a couple of years in pre-merger duration but in post-
merger, the cash was increasing at 5% and 21% respective years. After merger SBI
started maintaining the cash in hand for the liquidity requirements of the bank.
11. The balance maintained in RBI in pre-merger duration was increasing year by year,
even though it reduced in the first year after merger due to the consolidation process,
it has picked up in the second year and got stabilised.
12. The 2nd year of post-merger (Rs.93964.77 Crore) around 9% of the investment value
reduced by state bank of India.
13. Interest from others also reduced after the merger around 6% & 15% reduced
respective post-merger years because the inter-bank funds have reduced in pre-merger
that funds have to be compensated on the post-merger.
14. The total advances and term loans issued are consistently increasing at 8% in pre-
merger and post-merger duration. It is understood that the operations of the bank did
not get affected, and it maintains the operating profit at the same pace in both pre and
post-merger period.
15. The total fixed assets value has reduced in post-merger duration upto 20% in the first
year and the status improved in the second year after the merger.
2
16. The result of correlation test regarding the fixed assets and its depreciation rate,
reveals that there is no significant relationship between increase in fixed assets, and
the increase the depreciation rate.
17. In post-merger, the interest on RBI balance & other inter-bank funds has reduced
around 6%, 47% in the respective years after the merger.
18. . In post-merger, the other interest earned has reduced to 5% & 14% in the respective
years after the merger.
19. The total other income was increasing with 21% in the pre-merger duration, but after
the merger, the income was increasing by 4% and in the following next year it has
reduced by 18% in post-merger duration.
20. The income on commission, exchange, and brokerage were increasing with an
average of 8% in both pre and post-merger duration.
21. In the second year of post-merger, the profit has reduced by 77%. It can be
understood that the process of consolidation after merger has affected the profit of the
bank.
22. After the merger the SBI paying more interest compared with 1st year of merger 2nd
year, it was increasing around 85% of the previous year (2017-18), the reason may
23. The total operating expenses were increasing averagely 12% in both pre and around
16% post-merger duration.
24. After merger provisions and contingencies have increased around 57%, but the 2 nd
year of merger around 13% reduced comparatively 1st year of post-merger.
25. There was no impact of merger on the miscellaneous income of the bank. It is in the
increasing trend even after the merger.
3
26. In case of the independent sample test to understand the consistency of operating
hypothesis as accepted. Hence the operating profit is not consistent between pre and
post-merger.
27. In case of the independent sample test conducted to understand the consistency of net
hypothesis as accepted. Hence there is no consistent increase of net profit before and
after merger.
28. Out of 120 respondents 103 respondents are well educated alike Under graduate, Post
Graduate and Ph.D also. Most of 55% of the respondents were using bank accounts in
subsidiary banks by Private and Government employee’s only.
29. According to the ANOVA test, all the customer satisfaction variables are significant
with monthly Income of the customers. Majority of the customers are felt happy
regarding the merger.
5.2.SUGGESTIONS
1. It is suggested that the capital reserve to be maintained consistently to protect the
interest of the shareholders and also as a safety measure for any future capital losses
or sudden withdrawal of deposits by the account holders for any reason.
2. As per the findings it can be understood that the other liabilities & provisions are
decreased by 9%after the merger. This decreasing trend of other liabilities and
provisions will help maximize the profit of the bank and in turn benefit the
shareholders and the management of the bank.
3. Reserves & surplus and the statutory reserves were increasing consistently in the pre-
merger period and started declining after merger. It is suggested that there is a need
for efforts to increase the reserves and surplus in the coming years.
4
4. After the merger around 7.6% of balance maintaining at RBI reduced by the State
Bank of India in 2017-18 and again increased in 2018-19. It is suggested that SBI
needs to maintain the balance with reference to the RBI standard to maintain CRR &
SLR.
5. The value of the fixed assets reduced up to 20%, because of the consolidation and
valuation process after merger. It is suggested that the bank need to increase the fixed
assets. In general, higher the fixed assets will help to achieve higher business or sales
in an organisation.
6. The earning of interest/discount earned on advances/bills was reduced by around 8%
compared with pre-merger, SBI needs to concentrate the increase the earnings for the
upcoming years as it is a necessary requirement for increasing the profit.
7. In post-merger, the interest has reduced around 6% from 2016-17 to 2017-18, again it
has reduced by 47% in the year 2018-19 because the inter-bank funds have reduced. It
is suggested that the bank need to increase the balance with RBI and Inter-bank funds
to increase the interest from this source.
8. In the second year of post-merger, the total income has reduced by 18% as per the
findings on the analysis of total income after merger. It is strongly suggested that the
bank need to make efforts to improve the total income of the bank to avoid
profitability issues which may lead to other consequences.
9. Investments in various avenues reduced after merger, which would reduce the income
level and the stability of the bank. It is suggested that the bank need to put efforts for
increasing the investment in all possible portfolios.
10. After the merger, SBI needs to reduce the other kind of interest or discount paid to all
borrowings from the financial institution. It includes administrative expenses, selling
and distribution expenses, director fees and other indirect expenses.
5
11. The net profit of the bank got reduced in the last financial year due to the merger and
it is more negative too. If the same is been continued in the future then it may affect
the share value of the bank and also the investors. So it is suggested that the remedial
measures are to be taken to increase the net profit of the bank in the next financial
year.
12. The study also revealed that the stability of the bank is also questionable after the
merger as the ratios show an instability with the operations of the banks. For this
purpose, the bank can look after the NPA (Non-Performing Asset) to reduce the
instability at the earliest.
13. Strict measures are to be taken for recovering the loans and interest of loans to be
received from the customers. Within the scope of the government regulations,
stringent actions to be taken on the defaulters. Banks branches are to be made
responsible for the NPAs.
14. SBI has separate branches for loans in major cities in India. Likewise it is even
profitable to have an exclusive divisions/braches for controlling NPAs. Because of the
workload of employees of the SBI regular branches, the employees are not able to
concentrate on NPAs and due to this reason the NPAs are on the increasing trend.
15. Strict actions are to be taken at all levels on the irregularities on the documentations
and unauthorised approvals, loans given above the sealing and favouring for personal
advantages and other fraudulent activities.
16. The branch managers are to be empowered and made accountable for the recovery of
the loans and advances issued and they should also be supported for taking action
against the defaulters within the regulations of RBI and the Government.
6
5.3.CONCLUSION
After the merger, the financial performance of the State bank of India is growing and most of
the expenses have reduced as the operations of the bank executed with economies of scale.
The merger was beneficial for enlarging the capital of the state bank of India, and the
associate’s bank's loss is compensated with the help of the merger. Associates Banks
customers are included in the state bank of India and considered on par with the customers of
SBI. The profitability performance of the bank after the merger going good. Depositors and
investors are getting good interest and returns, and the interest rates also reduced for various
loans and advances provided to their customers.
Merger is an advantageous tool for expansion and growth of the state bank of India. It was
helpful for the survival of weak associate banks by merging into a state bank of India. The
researcher took this analysis to find the success level of the merger, and the progress of the
bank in terms of the performances at all directions and levels comparing the status during pre
and post-merger. Net profit of the bank has reduced in the two years after merger as the bank
is in the process of consolidation and settle the issues of all the associate banks.
Still the position of the bank has not been stabilised with reference to NPAs. Efforts are being
made to reduce the NPAs of all the banks through various methods. Researcher also
suggested measures for reducing NPAs of SBI. Implementation of such measures would
reduce the NPAs and improve the status of the bank in terms of its profitability and other
performances. So the bank has to make efforts to stabilise its operations by considering the
suggestions given by the researcher to increase the share value of the bank and improve the
status of SBI the largest bank in India.
7
5.4. SCOPE FOR FUTURE RESEARCH
Before the merger, the associate banks are running under the loss, so compensate this after
the merger of State bank of India & its associate banks financial aspects and the various
strategy has adopted to overcome the financial crisis. This research has made only the
financial perspective based on current situations.
This research has been conducted with limitation of financial perspective only, but in future
it may be carried out on other performance alike, Administration, Human Resources,
Operations management, Customer relationship management, and Marketing Management,
etc.
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;

Sbi Ma

Uploaded by

Document Informationclick to expand document information

Document Informationclick to expand document information

Copyright:

Available Formats

Sbi Ma

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sbi Ma

Uploaded by

Copyright:

Available Formats

“Pre and Post Merger Financial Performance Analysis of

State Bank of India and its Associate Banks”

Thesis submitted to the University of Mysore in fulfilment of

The requirements for the degree of

Under the Guidance of

Dr. R. SOUNDARA RAJAN

Department of Management, University of Mysore

MERGER FINANCIAL PERFORMANCE ANALYSIS OF STATE

BANK OF INDIA AND ITS ASSOCIATE BANKS”, is the result of

research work carried out by me under the guidance and supervision of

Dr. R Soundararajan, Professor, Department of Management, ISBR Research

of diploma or such other similar title.

This is an original work, done as per the regulations of the University

(Dr. R. Soundararajan) (Dr. K. S Anandaram)

Research Guide Director

I would like to extend my gratitude to the honourable Vice-Chancellor, Registrar and

I would like to extend my deep gratitude to Dr. K S Anandaram, Director, ISBR

I am also grateful to Mr Kamal Kushiyaet, Mr. Thirupathi, Dr. Lakshman,

I thank almighty for the grace showered on me, to make it happen.

List of Tables VII

List of and Diagrams XIII

Chapter II: Review of Literature 34

Chapter III: Research Methodology 57

Chapter IV: Analysis and Interpretation of Data 73

Chapter V: Findings, Suggestions and Conclusions 180

Appendix I: Consolidated Bank Financial Statement 199

Annexure I: Survey Instrument 219

Annexure II: Research Publication 221

CHAPTER – 2 REVIEW OF LITERATURE 34-48

2 2.1 Introduction 34-48

CHAPTER – 3 RESEARCH METHODOLOGY 57-72

CHAPTER – 4 ANALYSIS AND INTERPRETATION 73-179

CHAPTER – 5 FINDING, SUGGESTION, AND 180-187

Table No Page No.

4.31 Correlation Analysis Of Fixed Assets And Deprecation 114

Pre Merger Versus Post Merger Other Assets of SBI& Its

4.38 Correlation Analysis Of Saving Bank Deposit 124

Pre Merger Versus Post Merger Term Deposits of SBI& Its

4.40 Correlation Analysis Of Term Deposits 127

Pre Merger Versus Post Merger Earnings of SBI& Its Associate

4.71 Descriptive Statistics On Operating Profit 161

4.72 t-Test On Operating Profit 162

4.74 Descriptive Table On Net Profit 164

4.75 t-Test On Net Profit 165

4.76 Correlation Analysis Of Net Profit And Operating Profit 166

4.77 Multiple Regression Table 167

4.78 Descriptive Table Of Net Profit And Loss 168

Pre Merger Versus Post Merger Provisions And Contingencies of

Index of customer satisfaction impact during pre- merger versus

Technology impact during pre- merger versus post- merger of

Figure No Description Page No.

3.2 The List of Banks In Pre And Post Merger 68

4.1 Trend of Cash In Hand of SBI And Its Associate Banks 91

4.5 Dependent Variable For Net Profit And Loss 168

Trend of Provisions And Contingencies of the SBI And

Scope for future research

1.1 INTRODUCTION TO BANKING