Date:15/11/2005 URL: http://www.thehindubusinessline.com/2005/11/15/stories/2005111503090600.htm

Back SBI hopes to retain 15-20 pc of IMD

Our Bureau

The IMD bond was issued in 2000 to increase the country's foreign exchange reserves.

Mumbai , Nov. 14

STATE Bank of India hopes to retain 15-20 per cent of the $5.5-billion India Millennium Deposits (IMD) that will mature in December.

Mr A.K. Purwar, Chairman, SBI, said the bank was organising a drive to offer products such as deposits, and also insurance and mutual funds jointly with their respective subsidiaries to attract investors. The IMD bond was issued in 2000 to increase the country's foreign exchange reserves. The bank has also made arrangements for 100 per cent redemption of the bond, if needed, he said.

Mr Purwar was speaking to newspersons at the sidelines of a press conference to announce a joint venture with TCS Ltd to set up an IT subsidiary.

Overseas acquisition: When asked about overseas acquisitions, Mr Purwar said SBI might look at a large to medium overseas acquisition of over $10 million in the next two to three months. It is also interested in acquiring a bank in Bangladesh.

"In a couple of months, we will have expertise to acquire a large bank. Global acquisitions will succeed only when domestically we are strong," Mr Purwar said.

In the current financial year, SBI has acquired banks in Mauritius, Kenya and Indonesia, each for below $10 million. It has 66 offices in 29 cities and is one among the 12 top banks in Asia and top 100 banks in the world. It is also planning to open two branches in Pakistan soon.

Bond issue: SBI has also got approval from its board for raising Tier II capital of Rs 3,300 crore. The bond issue is likely to hit the market in the next two to three months. Of this, around $200 million (Rs 915 crore) could be through an overseas bond issue, Mr Purwar said.

On a question of the possible revision in interest rates, Mr Purwar said it was being discussed and a decision would be taken shortly. He also said all banks were working on the Prime Lending Rate issue, following guidelines by the Reserve Bank of India in the monetary policy and have held meetings with the Indian Banks' Association.