SBI mulls PE foray

With private equity funds gathering momentum, State Bank of India (SBI), country's largest public sector bank is also mulling to make a foray into private equity funds space very soon.

Speaking on the sidelines of an interactive session organised by Confederation of Indian Industry (CII) on ‘Alternatives to SME financing’, Jayanta K Sinha, chief general manager of State Bank of India (SBI), pointed out that SBI was planning to foray into private equity funds which might not be focussed on SME exclusively but may focus on infrastructure and other sectors also.

However, he mentioned that the whole idea is under incubation and still at an embryonic stage. The SME business of the bank was one of the fastest growing segments and it recorded all-India business of around Rs 76329 crore as on March 31, 2008.

The segment recorded a robust growth of 30 percent compared to last year's performance which was around Rs 58674 crore, he added.

If the present momentum of growth is maintained SBI also expects to touch Rs 100,000 crore in another two years time, said Sinha.

What emerged is that several banks, both public and private sector have shifted their attention to SME business because of the sector's high potential reflected in its bouyant performance despite the current economic upheaval.