The merger between State Bank of Saurashtra and State bank of India has been approved by India, which will help the smaller banks face challenges better.

After a cabinet meeting, Priyaranjan Dasmunshi reported that the merger would help State Bank of Saurashtra to face the competition arising from globalization of the economy. Further it will also augment efficiency and enable better management of risk.

The order would be issued by the government under which it will sanction the merger and move the bill in parliament to repeal State Bank of Saurashtra Act and amend State Bank of India (subsidiary banks) Act for the merger to take effect.

But the news of merger has not gone down well with the officers union of both the banks, as they feel it will lead to job cuts. A “country wide strike” could be taken out by the All India State Bank Officers' Federation, if in case the merger is taken ahead by the government and banks’ management.