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SBI open to tie-ups for personal banking products

State Bank of India Chairman Maya Shankar Verma today said the bank is ready to make strategic alliances with both domestic and international players in specialised areas of personal services in order to provide a diversified range of products for clients of various social strata.

Speaking to newspersons just before the bank's 43rd annual general mMeeting in Bombay, Verma said the bank was focusing not only to increase its size and volume of business but also quality of services through outsourcing the selected technological and operation needs and by networking through subsidiaries as well as other like-minded and like-positioned organisations.

It would be very cost effective and fast, if the bank goes in for expanding its foreign network through alliances and tie-ups with dominating banks in respective countries.

Similarly, in India, SBI which holds a 15 per cent equity in Thomas Cook, could easily have a tie-up with Thomas Cook for offering variety of ranges of travel-related products to its clients.

"We think such an approach would help an organisation like the SBI in retaining its core competencies while providing it with an opportunity to leverage these competencies for increasing business relationships and profitability," he said.

In this context, the chairman emphasised the need to bring changes in the legislative framework to enable banks to face the challenges of a rapidly changing milieu.

Citing an understanding and co-operation that SBI had initiated to augment foreign currency deposits through its Resurgent India Bonds with foreign banks and institutions, Verma said "it was a variant of that thinking where we could leverage each others' strengths and competencies."

On RIBs, Verma said the bank had received an enthusiastic response from all overseas centres and there might be some compulsion to extend the minimum subscription period of ten days beginning yesterday. "Although we have received a meagre $ 15 million on the very first of subscription, the major chunk of subscription would start arriving in next three to four days," he said.

In case of multiple oversubscriptions to the $ 2 billion target, there will not be any problem of profitable deployment of foreign currency dominated funds since there would be external commercial borrowings to the extent of $ 700 million by the Indian corporates in the next three to four months.

"Additionally, there would be a large requirement of foreign exchange for our infrastructure projects which is likely to kick-off implementation from the fourth quarter of the year," Verma saiid, ruling out any cut in interest rates as well as bank rates in the near future since the demand for funds is expected to pick up in the near future.

Welcoming the Centre's decision to cut export credit from 11 to nine per cent, Verma said "this was a bold step towards increasing our exports and the SBI is keen to participate in government efforts to revive growth in exports. The lowering of interest would not put any limitations on banks to extend export credit in bigger volumes."

UNI