SBI may have subsidiary to manage its vast real estate

State Bank of India, the country's largest lender, is exploring an option to set up a wholly owned subsidiary to manage its large portfolio of real estate, including at least 1,000 offices and 10,000 officers' apartments.

The bank is among the largest real estate outfits, after establishments such as the defence ministry, Indian Railways and Life Insurance Corporation of India. The balance sheet as of end-March this year showed the book value of the premises at Rs 2,091 crore.

SBI is the second banking entity to explore such a route. Earlier, government-owned Bank of India had mooted the same idea. It had planned to raise money to infuse capital for its banking operations by transferring real estate assets to the proposed subsidiary.

A senior SBI executive said the bank planned to rope in a consultant for this work. The proposed subsidiary would undertake the activities currently performed by its premises & estate department, engineers at administrative offices and desk officers attached to regional managers across the country.

SBI's plans are subject to approval from the Reserve Bank of India, the executive clarified.

The present emphasis is to have own premises, as far as possible, particularly for housing administrative offices, learning centres, centralised processing cells and district branches.

The proposed subsidiary will aim to reduce costs, improve operational efficiency and productivity, and streamline processes.

It is also hoped to create a better working environment and construct environment-friendly landmark buildings, with good landscaping. Thus, making work/stay places pleasurable and enhance the bank's image.