The Hindu : Business : SBI in talks with four banks

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Tuesday, Jul 26, 2005

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Business

SBI in talks with four banks

Special Correspondent

To emerge as a major global player

KOLKATA: State Bank of India is eyeing more acquisitions and is in talks with four banks, SBI Managing Director, T. S. Bhattacharya, said.

Talking to reporters after addressing a Federation of Indian Chambers of Commerce and Industry (FICCI) conclave on `Banking for double digit growth of the Indian economy', he declined to give either the names of the banks or their locations saying that it was premature to talk of such things. "All I can say is that they are not very big and the due diligence is currently on."

He said SBI was trying to emerge as a major player in the global arena and had already acquired a bank each in Indonesia and Mauritius. He said as the Indian economy moved into the high growth mode, banks would extend support through convergence and consolidation.

On Dabhol equity, Mr. Bhattacharya said ICICI, IDBI, and SBI together would have a shareholding of Rs. 500 crore with GAIL and NTPC holding the remaining Rs. 1,000 crore in the proposed entity, Ratnagiri Gas and Power Pvt. Ltd. Among banks and financial institutions, ICICI's holding was likely to be the highest followed by IDBI and SBI. Mr. Bhattacharya indicated that SBI's holding would be about Rs. 147 crore.

Earlier, he said the banking sector's infrastructure funding would have to improve. There was large scope for financing the service sector which received only 14 per cent of bank credit despite having a 56 per cent share in gross domestic product. In this context he said that banks' future credit growth would largely hinge on developments in infrastructure, retail and microfinance which were going to be the future growth drivers of the economy.

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