The State Bank of India plans to integrate many of the bank's functions with that of its seven subsidiaries, including treasury operation, ATMs and technology, in the near future for greater synergy and growth.

Although merger of the subsidiaries with the parent bank does not seem imminent at present, top SBI officials said the country's biggest bank intends to merge branches, which are closely located and redundant, in near future as part of plans to rationalise operations and reduce costs.

"In the first phase, we will go for swapping of branches among the different subsidiaries. In the next phase, we will go for branch mergers," they said.

For instance, State Bank of Patiala will swap branches with State Bank of Hyderabad as the two banks are concentrated in the northern and southern part but want to have presence across the country.

Ruling out direct merger of its arms with the parent SBI, the officials said: "It seems difficult due to diverse culture inculcated in each of the subsidiaries."

Apart from having a nationwide presence, SBI has its arms spread over the country through its seven associates -- State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Indore, State Bank of Saurashtra, State Bank of Mysore, State Bank of Hyderabad and State Bank of Travancore.

The officials said the bank is already in the process of merging treasury operations accounting for over Rs 1,20,000 crore (Rs 1,200 billion).

In the near future, treasury operations will be handled from SBI's head office in Mumbai, they said.

In the last few years, treasury operations have yielded hefty profits for SBI and its associates with fall in interest rates and rise in government security prices.

Moreover, SBI officials said the bank has decided to integrate all its associates in terms of the technology upgradation for which it plans to invest Rs 500 crore (Rs 5 billion) within the next few years.

The technology upgradation that is being implemented in collaboration with IT major Tata Consultancy is aimed at inter-connecting all the branches and ATMs of SBI.

Following the technology integration, the ATM cards issued by associate banks can be used in 1,600 odd SBI outlets as well, they added.