SBI Gilt to take SBI Caps' help

By Our Special Correspondent

CHENNAI, FEB. 12. SBI Gilts will tap the expertise of SBI Capital Markets, the merchant banking arm of State Bank of India group, to develop a market for government securities in South India.

Addressing a press conference here today, the Managing Director of SBI Gilts, Mr. R. C. Royappa, said, ``we will try to associate the officials of SBI Caps here by giving them training.'' Typically, they would be adequately equipped to provide prospective investors `safe services.'

SBI Caps, he said, would ideally be in a position to provide investors information on security auction, auction results, secondary market trades, prices/yields of securities and what not besides facilitating trades with SBI Gilt.

Mr. Royappa said Government securities or gilts were safe, liquid and yielded better returns when compared to other conventional forms of investment opportunities. Especially for corporates and high net worth individuals, gilts could prove an attractive alternative investment opportunities, he said. From a turnover of Rs.200-250 crores a few years ago, the gilt market had now grown to over Rs. 4000 crores daily, he said. Nevertheless, much of the business was done only in Mumbai. In this context, Mr. Royappa felt the lack of liquidity had proved a major irritant for an active gilts' trading in the South.

To facilitate retailing of Government securities, SBI Gilts, he said, had allowed individuals to open SGL (subsidiary general ledger) account. This would help investors have investment in demat form.

To a question, Mr. Royappa said SBI Gilts would go for an in- depth study of options before it in the wake of new provisioning norms announced recently. A decision on further capital infusion would be taken only after the study was completed, he said.

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