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SBI is ready for unlimited investments to become a hi-tech bank: Vaidya

Fakir Chand in Bangalore

India's largest bank, the State Bank of India, is working overtime to catch up with private banks in adopting information technology. Come next week, the SBI will launch its Internet banking operations. By the fiscal year-end, SBI hopes to foray into e-commerce, e-brokering and e-trading.

SBI Chairman G G Vaidya told rediff.com there would not be any constraints on SBI's investments in infotech applications for its operations.

The bank would announce the appointment of a technology consultant soon to draw a blueprint for the rapid networking of its branches across the country, and pave the way for introducing Internet banking in the NRI branches, main branches in metros and major cities, besides specialised personal branches.

Vaidya disclosed that the bank is awaiting an amendment to the SBI Act of 1949. The bank is seeking to restructure its equity and lower the Reserve Bank of India's 59.72 per cent stake to 55 per cent.

"We hope it will take place during this year. Alternatively, the bank may go in for a rights issue to raise Rs 50 billion as part of capital resource mobilisation so that the bank's Capital Adequacy Ratio or CAR could be maintained above 12 per cent against the RBI-stipulated 9 per cent," he said.

'Gold deposit scheme picking up momentum'

Vaidya was in Bangalore to launch the SBI's Gold Deposit Scheme or GDS in Karnataka. The bank has been trying to mobilise tonnes of gold held by individuals, Hindu undivided families, charitable trusts and temple authorities.

Since November 1999 when the GDS was launched, the bank has mobilised around four tonnes of gold, mostly from individuals and HUFs. "The bank has projected a target of 100 tonnes in the first year. Although the GDS had a sedate start, the response during the last couple of months has been encouraging as people are realising the benefits of depositing their gold ornaments which are in the form of jewellery or personal property."

Vaidya also announced that the GDS would be launched in another dozen cities by the year-end, including Hyderabad, Calcutta and Madras, though informally the scheme was being offered now.

The mobilised gold was being loaned in the metal form to the domestic jewellery industry to minimise the country's dependence on imports, which has been a drain on the exchequer to the tune of Rs 300 billion annually.

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