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SBI may merge NPA- ridden factoring arm

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is likely to merge its factoring arm, , a company which posted loss of Rs 125 crore in 2010-11, due to higher provisioning on the back of mounting non-performing asset.

Parliament in December passed the , , which aims to address problems faced by small and medium enterprises. The Bill also allows banks to undertake factoring activity, so the incentive to run a separate company by a bank is absent.

“SBI Global Factors has turned around in this quarter and we are now deciding the future course of action for the company. Either we will rope in a strategic partner or merge it with the bank,” said , chairman.

SBI holds 85.39 per cent stake in SBI Global Factors. The remaining 14.61 per cent is held by Sidbi, Bank of Maharashtra and Union Bank of India.

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