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Our Bureau

Bangalore , June 8

STATE Bank of India (SBI) expects to grow its income in the current fiscal by 18-19 per cent buoyed by heavy infrastructure lending and financing service sector as well as farm credit, the Chairman and Managing Director, Mr A.K. Purwar, said.

However, he ruled out fresh capital infusion to fund such growth.

"Infrastructure is a very good business opportunity," Mr Purwar said. The bank, which has mandated consultancy major McKinsey to detail a roadmap for a better process, ruled out second round of voluntary retirement across its 9,000 branch network to shed excess staff.

SBI, which has computerised all operations, is in the process of installing core banking solution, and that has led to talks of a possible VRS.

"SBI group is in a transition stage," Mr Purwar said, adding, "After two-three years we have to look into the evaluation of the staff."

Declining to detail McKinsey's recommendations, Mr Purwar said that the bank would like to take advantage of its vast network to push the sales of non-banking products.

SBI's insurance joint venture has generated business of close to Rs 200 crore in the last financial year and is expected to vault to "either second or third private insurance player" in 2004-05 with business through five-time income growth.

Meanwhile, the bank may also outsource bad loan recovery to a third party in line with McKinsey recommendations, Mr Purwar indicated. In its bid to bring down its net non-performing asset ratio to advances to two per cent by March-end, SBI might also look into forming a specialised cell to carry out the recovery, he added.

It would also rope in a new equity partner in its mutual fund business by March 2005, Mr Purwar said. The new partner would be a minority stakeholder in the venture.

More Stories on : Public Sector Banks | Credit Market

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