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SEC waves green light to SBI's Resurgent Bonds in the US

A Staff Reporter

The State Bank of India has secured the approval today from the US Securities and Exchange Commission to market as well as advertise Resurgent India Bonds in the United States.

The SBI hopes to net 25 to 30 per cent of its RIB target of $ 2 billion from US-based Indians, particularly those in Silicon Valley. Its plans could have gone awry had the SEC refused to give its clearance.

SBI Chief General Manager N K Puri told Rediff On The NeT that the SEC's stipulations on liabilities have been met. "We are all set to market RIBs in the US," he said.

SBI will target NRIs and overseas corporate bodies based in the US.

SBI has written to the Reserve Bank of India to waive the penalty clause on depositors of foreign currency non-residents accounts, in case of premature withdrawals, particularly during the months of August and September.

"This would help a large number of NRIs whose FCNR deposit accounts are likely to mature shortly. They would be able to invest their money in the RIBs," Puri said.

At present, in case of premature withdrawal of deposits, the RBI imposes a penalty at the rate of one per cent on the interest margins of FCNR deposits.

"The SBI has requested RBI to waive this penalty up to September 30 so that NRI investors may get an opportunity to convert their FCNR deposit amounts into RIBs," added Puri.

Indian embassies at major capitals have been asked by the bank to promote RIB sales. Leading banks like Citibank and Bank of America are expected to help in marketing the bonds in the US.

SBI had also launched a Website containing the offer document and downloadable versions of the application forms, which investors can download and take printouts.

To ensure that a large number of people can connect to the site simultaneously, the entire Website is mirrored at another location.