State Bank of India (SBI) has received in-principle approval from the Reserve Bank of India (RBI) to form a subsidiary to manage the real estate assets of the country’s largest lender. In the long run, banks may monetise these assets. Ashwini Mehra, its deputy managing director and corporate development officer, said the bank has about 44 million square feet of owned assets and 50 million square feet of rented properties.
Properties owned by the bank, valued at over Rs 23,000 crore, would continue to be housed on SBI’s balance sheet. But its management would rest with the subsidiary, leading to efficiency and cost reduction, he said. Some of the employees engaged in managing SBI's real estate and engineering activity would move to the subsidiary, which is slated to become functional next year. KPMG would help set up the new company. The aim is make the subsidiary work on a standalone basis and use professional expertise to manage properties for the benefit of the parent, Mehra said, adding there were no immediate plans to monetise these properties.