The Union Cabinet on Wednesday approved the merger of the State Bank of India with five of its associate banks – State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore. Union Finance Minister Arun Jaitley said that while the Cabinet had already given an in-principle approval for the merger, it had now adopted suggestions given by the banks’ boards, The Hindu reported.

“This will lead to far greater operational efficiency and synergy of operations within these banks,” Jaitley said. “It will decrease the cost of operations, which will also result in a decrease in the cost of funds.” In a statement, the central government said the decision is likely to result in recurring savings estimated at more than Rs 1,000 crore for the first year after the move. “Existing customers of subsidiary banks will benefit from access to SBI’s global network.”

In an earnings call last week, SBI Chairperson Arundhati Bhattacharya [pictured above] said the banks were ready to begin merger proceedings, Moneycontrol reported. “As soon as the government notifies the final order, we will be ready to kick it off,” she said. “We were planning to do it by March but because of demonetisation it will probably mean a deferment of a quarter.”

SBI’s board had approved the merger in August 2016. The board had said that the salary and allowances of the staff of the merging banks would not be less than their counterparts at SBI, adding that the benefits of the retired employees would be protected as well. The mergers will also see India’s largest lender move into the top 50 banks in the world in terms of assets.