State Bank of Indore has raised its BPLR by 50 bps

State Bank of Indore has raised its BPLR by 50 basis points which will be 13.25 per cent. Thus home, auto and corporate loans will become expensive for the existing borrowers.

Earlier the parent bank State Bank of India (SBI) had raised its BPLR by 50 basis points to 12.25 per cent. Its new rates came into effect from August 17.

SBI has informed that the merger process of State Bank of Indore with SBI will start from August 26. Therefore the entire undertaking of State Bank of Indore will be transferred to and vested in State Bank of India from August 26.

On July 28, 2010, the government had issued the 'Acquisition of State Bank of Indore order 2010'. It said, as per the order the process of amalgamation will begin from the 30th day from the date of order that is August 26.

The SBI board had given its approval last year following this Centre also given an in-principle approval. SBI will have a 98 per cent stake in State Bank of Indore.

SBI has already made an announcement of swap ratio of 34:100 for the merger, thus SBI will be giving 34 shares for every 100 shares of State Bank of Indore held by minority shareholders.

Hence SBI will issue up to over 1.16 lakh shares of face value of Rs 10 each to minority shareholders of State Bank of Indore.

After this merger, there will be only five associate banks of SBI-- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. Among these, the State Banks of Bikaner and Jaipur, Mysore and Travancore are listed companies.