SBI open to buyouts, says chairman Purwar

THE EUROMONEY INDIA CONFERENCE

State Bank of India Chairman A K Purwar said the bank was open to acquisitions either directly or through its seven associate banks.

"If there is a good deal, we are open to it "" either through us or our subsidiaries," Purwar told reporters on the sidelines of the Euromoney conference.

He also said interest rates in the short-term are likely to remain stable but it was difficult to predict their movement in the medium and long term.

"In the short-term, interest rates will be stable. But it is difficult to say on the medium and long term due to the uncertainty in the oil prices," Purwar said.

He added there was a likelihood of banks hiking home loan rates owing to a higher risk weightage that they are now required to assign to the portfolio.

In the busy season credit policy last month, the Reserve Bank of India had raised the risk weightage on home loans to 75 per cent from 50 per cent.

"Inflation is an issue, (global) oil prices remain a concern," Purwar added. Government bond yields have risen in the last few months owing to tight inter-bank liquidity and rising inflation.

But Purwar said that economic developments in the country have been encouraging this year.

"As a banker, I have never seen this growth for the last 10-15 years," Purwar said adding that several Indian companies were drawing up expansion plans.

"The change in pattern in growth of exports in favour of manufacturing goods indicates the firming up of demand," he said at the conference.

Purwar said an indication to the investment boom was evident from the power sector where 11 projects with a capacity of 4,000-megawatt and an estimated cost of Rs 12,000 crore had achieved financial closure during the last six months.