The Government of India had earlier announced to merge the remaining 5 State Banks with SBI. There were 7 associate State Banks and two of them State Bank of Indore and State Bank of Saurashtra were merged with SBI in 2008 and 2010 respectively.
After some deliberations, finally the 5 banks shall merge with SBI on 1 April 2017.
This blog had earlier written and lamented about lack of history of these Associate State banks. These were unique banks which were formed with support from Princely State. Some like Hyderabad were full central banks as it issued its own currency. Most others were quasi central banks and acted as banker to the State and even offered commercial banking services to public. It shall be fascinating to compare all these different banks across their functions.
Only State Bank of Travancore has released its history and even developed a museum.
Always curious to figure financial history, this blog dug up some bit of history from several RBI publications.
First, their origins. Originally, only Hyderabad and Patiala had the name State against their banks.
| Name | Year |
| Bank of Mysore | 1913 |
| Patiala State Bank | 1917 |
| Bank of Indore | 1920 |
| Hyderabad State Bank | 1941 |
| Travancore Bank | 1945 |
| State Bank of Saurashtra* | 1950 |
| State Bank of Bikaner and Jaipur@ | 1963 |
* In case of Saurashtra it was merger of 5 banks. In 1902, Bhavnagar Darbar Savings Bank was established in Bhavnagar by the Maharaja, Sir Bhavsinghji Takhtsinhji Gohil and Sir Prabhashankar Pattani, the later Diwan. In 1950 this Bhavnagar Darbar Bank merged with four other Durbar banks – Rajkot State Bank, Porbandar State Bank, Palitana Darbar Bank and Vadia state bank. These five together were renamed as SBS under Saurashtra state Bank (SBS) (Amalgamation) Ordinance.
@In case of State Bank of Bikaner and Jaipur, Bank of Bikaner formed by Maharaja Ganga Singh of Bikaner in 1944. The Government of Jaipur invited industrialist Ramnath Anandilal Podar to organise Bank of Japiur in 1943. Both made members of State Bank of India in 1960 and merged as SBBJ in 1963
Later all were called as State Banks.
| Included in SBI | |
| State Bank of Mysore | 01-Mar-60 |
| State Bank of Patiala | 01-Apr-60 |
| State Bank of Indore | 01-Jan-60 |
| State Bank of Hyderabad | 01-Oct-59 |
| State Bank of Travancore | 01-Jan-60 |
| State Bank of Saurashtra | 01-May-60 |
| State Bank of Bikaner and Jaipur* | 12-Jan-63 |
* In case of SBBJ, State Bank of Jaipur and State Bank of Bikaner became part of SBI on 1-Jan-1960.
In 1959, their financial positions were as follows (in millions):
| Capital | Reserves | Deposits | Total Assets and Liabilities | Loans | Branches | Profits | |
| State Bank of Bikaner | 5 | 2.7 | 131.2 | 173.4 | 61.2 | 54 | -0.29 |
| State Bank of Jaipur | 5.0 | 1.5 | 99.4 | 137.5 | 33.4 | 40 | -1.02 |
| State Bank of Hyderabad | 5.0 | 2.7 | 184.9 | 219.3 | 61.0 | 53.0 | 0.5 |
| State Bank of Indore | 1.5 | 4.6 | 88.5 | 102.8 | 49.5 | 18.0 | 0.4 |
| State Bank of Mysore | 5.0 | 10.0 | 193.8 | 258.1 | 99.3 | 42.0 | 1.6 |
| State Bank of Patiala | 1.5 | 3.7 | 92.6 | 121.4 | 28.3 | 48.0 | 0.6 |
| State Bank of Saurashtra | 10.0 | 4.8 | 164.5 | 192.5 | 63.8 | 61.0 | 1.7 |
| State Bank of Travancore | 10.0 | 2.7 | 69.8 | 103.7 | 32.1 | 20.0 | 0.2 |
Source: RBI
- In terms of capital, Saurashtra and Travancore were largest and Patiala and Indore smallest.
- In Deposits, Mysore was the largest. Smallest was Travancore
- Mysore topped loans as well and Travancore smallest.
- Mysore was the largest in total size as well. Smallest was Indore.
- In branches Saurashtra had highest with 61 and Indore lowest at 18.
- Profits again Saurashtra topped with Rs 1.7 million. Both Bikaner and Jaipur were making losses.
At the eve of mergers, this is how numbers look (in Rs millions):
| Mar-2016 | Capital | Reserves | Deposits | Total Assets and Liabilities | Loans | Branches | |
| State Bank of Saurashtra | 2008 | 4890.0 | 6560.6 | 161683.4 | 122413.3 | 122413.3 | 486 |
| State Bank of Indore | 2010 | 175.0 | 18240.0 | 306245.0 | 353693.9 | 236770.8 | 510 |
| State Bank of Bikaner and Jaipur | 2016 | 700.0 | 66728.0 | 940048.5 | 1103362.7 | 729274.6 | 1445 |
| State Bank of Hyderabad | 2016 | 207.5 | 103788.8 | 1371740.7 | 1645967.8 | 1110653.5 | 2074 |
| State Bank of Mysore | 2016 | 480.1 | 51937.8 | 705682.9 | 829750.0 | 539541.8 | 1157 |
| State Bank of Patiala | 2016 | 6615.3 | 72254.6 | 1069536.6 | 1310362.1 | 821857.1 | 1442 |
| State Bank of Travancore | 2016 | 711.0 | 59500.2 | 1011188.0 | 1145067.8 | 654662.7 | 912 |
Hmm.
As Indore and Saurashtra merged earlier, we compare other five.
- Highest capital is that of Patiala (surprising) and lowest of Hyd. However, Hyd has much higher reserves.
- Despite lowest capital, Hyd has highest deposits, Loans and total size as well.
- Mysore slips in rankings ranking last across parameters.
- Branches also highest in Hyd and lowest in Travancore. If we see ratios per branches, Travancore tops most indicators.
What explains this divergence in performance? Is it Political economy? Or is it the fact that these banks have run differently over the years. How does their performance compare before 1959?
Fascinating historical questions. The more you dig for answers the more you are trapped in questions..
Mostly Economics 
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