State Bank of India, the country's largest lender, is readying merger plans to absorb two of its minor subsidies, according to a report. SBI Commercial and International Bank (SBICI), a fully-owned unit with just two branches in Mumbai, is one of them and the merger may take place by the end of this year, The Economic Times quoted an unnamed senior official in the finance ministry as saying.

The other merger involves factoring services provider Global Trade Finance (GTF), in which SBI owns a 92.60 per cent stake and Bank of Maharashtra the rest. This is slated for merger with SBI Factors, which is in the same line of business.

''Since SBICI is a wholly-owned subsidiary of SBI, there should not be any problem. For GTF, they (SBI) need to get approval from the board of Bank of Maharashtra,'' the source said.

In the case of GTF, the issue has been discussed informally between SBI and the finance ministry officials. SBI officials said Bank of Maharashtra has no objection to the merger plan, but an official view will be firmed up by its board, the report adds.

SBI emerges as top taxpayer
Meanwhile SBI emerged as the largest pre-payer of tax for the first quarter, making it the first time in the history of corporate India that a bank became the country's highest tax-payer. Former leader Oil and Natural Gas Corporation slipped to second place.

According to the advance tax data for the first quarter April-June 2009, SBI posted a handsome growth in its profit while depositing Rs1,068 crore in the tax kitty, while state-owned ONGC deposited Rs890 crore.

Corporate entities have to pay the first instalment of advance tax payments by June 15 of every financial year. This is seen as a good indicator of corporate profits, as firms pay their taxes based on their estimate of profit.

The profitability of the state-run SBI zoomed by more than 61 per cent against Rs663 crore it had paid in the same period last year when the economy was growing at a rate of 9 per cent. During the same period, ONGC's profit came down by 33 per cent from Rs1,333 crore in the first quarter last year to Rs890 crore.

While all the results of advance tax payments for the first quarter are yet to be compiled by the Central Board of Direct Taxes, the available data reveal that among the top 25 companies, 11 are from the banking and financial sector and each of them paid the government between Rs100 crore and Rs1,000 crore for the April-June 2009 period.

While the profit margins of government banks range between 45 per cent and 90 per cent, private sector banks too have posted hefty growth but not in that degree.

The top 11 financial institutions which figure in the list of 25 highest tax-payers in the first quarter are SBI, ICICI Bank, HDFC Bank, Standard Chartered Bank, PNB, Bank of India, HSBC, Bank of Baroda, Citibank, HDFC Ltd and NABARD.

The highest growth of 89 per cent has been posted by Bank of India which has paid Rs231 crore tax, followed by Bank of Baroda which has paid Rs210 crore with a growth of 50 per cent and PNB with Rs236 crore marking an increase of 48 per cent over last year.

Among the private and foreign banks, ICICI Bank has paid the highest tax of Rs350 crore in the first quarter, followed by HDFC Bank Rs250 crore, HSBC Rs225 crore and Citibank Rs180 crore.

Among the others industries, Reliance and Tata seem to be among the major losers. The total Q1 tax payment of the diversified RIL was Rs314 crore as against Rs340 crore during the same period last year. Tata Steel paid Rs230 crore against Rs356 crore last year. SAIL's margins too have plunged as it paid Rs345 crore tax against Rs457 crore last year.