Sbi Plans To Retain 25-30% Rib Collections Abroad

The State Bank of India (SBI) plans to retain abroad around 25-30 per cent of the total amount collected through its Resurgent India Bonds (RIBs). This translates into around $500-700 million of the total collection.

M S Verma, chairman of the bank, addressing the press conference after the board meeting yesterday, said that funds will be deployed for a temporary period of two to three months in Indian papers floated abroad or lent as external commercial borrowings to projects pending for approval.

"We will not have a problem deploying these funds since there are projects worth around Rs 90,000 crore outstanding as of date," he said. Considering the number of applications that are pending, the entire amount retained abroad could be deployed through ECBs, he added.

 

According to a senior SBI official the bank has received applications for RIBs amounting to over $ 25 million as of yesterday afternoon. Verma said that the response on the first day indicated that not only will the number of RIB applications surpass the 85,000 figure received for its India Development Bonds floated earlier but there could also be some large value participants this time around.

For the current financial year, Verma said the SBI would focus on the personal segment especially housing, consumer finance and credit cards.

"We are experimenting on credit cards by issuing them in-house to ensure that the systems we have developed are error-free. We should be able to invite subscriptions by September and the issue of cards should begin by October," he said. The bank also plans to increase thrust on housing loans, consumer loans and special credit schemes during the year.

The deposit growth in the personal segment alone was around Rs 1200-1300 crore per month, he said. SBI has designated 100 branches to cater especially to the personal segment and embarked on improvement and change in the platform of services in these branches, said Verma.

SBI was also experimenting with the idea of implanting Thomas Cook counters in its branches. "A part of the business coming from this will be available to us," said Verma. SBI has a 15 per cent stake in Thomas Cook, a leading travel agency. "We are exploring alliances with banks both abroad and domestic. We are open to tying up with banks and financial institutions who are culturally similar and also with vendors wherever we can derive synergistic financial products", Verma said.

On the decline in its foreign exchange earnings over the last 15 months, Verma said that this had been caused by a reduction in spreads and increased competition, but the bank would concentrate on increasing turnover to make up for the squeeze on margins. In this context, he said that large accounts like IOC contributed to turnover but it was the smaller deals that really paid.