The proposal for merger of State Bank of India and State Bank of Indore may be taken by the Cabinet tomorrow for a final decision.

Sources say that the proposal would be taken up in a cabinet meeting to be presided by Prime Minister Manmohan Singh. If the proposal receives approval then it would be the second merger of SBI with one of its associate banks. The first such merger was with State Bank of Saurashtra on August 2008.

The central board SBI had given approval to the merger last year. The Centre had also given an in principle approval to the merger. The bank expects the merger to receive approval this month.

SBI has already announced a share swap ratio of 34:100 for the merger.

Following the merger, SBI will be left with five associate banks -- State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. Among these, the State Banks of Bikaner and Jaipur, Mysore and Travancore are puliclly listed companies.