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SBI to enter life insurance and gold businesses

State Bank of India will enter the life insurance sector after Parliament adopts the Insurance Regulatory Bill, SBI chairman G G Vaidya said in Bhopal today.

Addressing a media conference after SBI's 44th annual general meeting, Vaidya said the bank was in the process of identifying a joint venture partner for obtaining technological inputs and product mix.

Vaidya said SBI has got a brand equity and is known for trust and security. He expressed confidence that the bank would perform well in the insurance sector. SBI has a large network of branches and customer database.

Vaidya said foreign banks do not pose any challenge to SBI but said the bank is fully geared to deal with any situation.

Vaidya said the bank's focus was on the personal banking branches with distinct brand image.

He said 42 such branches had already been operationalised which he said were state-of-the-art outfits in prime ambience, catering to high net growth individuals, and dispensing personal banking products and services like electronic banking, telebanking and Internet banking.

Asked whether the presence of foreign banks in metros had affected the market share of SBI, he said there was a marginal decline in bank's market-share. There are only about 300 to 400 branches of these foreign banks and new private sector banks, he pointed out. SBI has opened more branches in these regions. ''In any case, we will not lag behind them,'' he added.

Throwing light on the recently introduced products, he said the bank has accorded top priority to housing finance activity by liberalising its housing finance scheme considerably.

For intensive financing, 497 branches were identified and as at the end of March this year, the bank had over 74,000 housing loan accounts with an outstanding amount of Rs 10.34 billion.

Pointing out that the bank was engaged in the promotion of technology-driven services to the investors in capital market, Vaidya said the bank was one of the co-sponsors of the two electronic depositories -- the National Security Depositories Limited and the Central Depository Services Limited.

He said the electronic clearing services have been extended to 29 cities, thereby reducing the handling of paper-based small value dividend and interest warrants to a large extent and provide fee-based income to the bank.

SBI is at an advanced stage of setting up a joint venture company for providing assaying facility of world class standards in India for gold business.

This would be in collaboration with a foreign partner and three other Indian banks.

In response to the Union Budget announcement about ''Gold Deposit Scheme-1999'', he said the bank had formulated a scheme for issuing transferable SBI gold bonds against gold deposits.

Vaidya said SBI is committed to make productive and economic use of the idle household gold and to develop a formal and structured gold market in India, including gold exchange with facilities for forward booking and hedging.

With the liberalisation of gold import policy, he said, the bank started sale of imported gold in the domestic market and has so far sold 75 tonnes of gold, valued at about Rs 30 billion through 38 outlets set up all over the country.

He said SBI was the first bank to introduce sale of smaller pieces of five and ten grams gold for the middle class purchasers.

SBI has sent a proposal to the Reserve Bank of India for lending metal gold to the jewellery exporters. The bank would borrow gold in the international market and on-lend to the exporters at very competitive rates which, he said, would help boost jewellery exports.

UNI

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