The Hindu Business Line : SBI to raise $600 m via MTNs to fund overseas expansion

STATE Bank of India plans to raise $600 million (Rs 2,607 crore) overseas through medium term notes to fund overseas expansion by June or July, the SBI Chairman, Mr A.K. Purwar, has said.

The bank had targeted to raise $1 billion (Rs 4,345 crore), of which $400 million (Rs 1,738 crore) has already been raised last year, Mr Purwar said. "We will raise the remaining amount by June or July," he said.

The bank's overseas balance-sheet was growing and this amount would be used as capital to fund the expansion, he added.

Mr Purwar was speaking on the sidelines of the international diamond conference - `Mines to Market' 2005, hosted by the Gem and Jewellery Export Promotion Council.

SBI, which is the second biggest lender to the diamond industry in India, plans to increase its exposure from Rs 2,600 crore last year to Rs 3,000 crore this year, he added.

For 2005-06, SBI also plans to focus more on backward linkages in the diamond industry. This includes exploration and mining. As of now, bulk of the bank's lending goes towards polishing units, said Mr K.B. Rajagopalan, Deputy General Manager, Diamond Branch, SBI.

The diamond industry is an attractive business for banks, as it has low NPAs, said Mr Biju Patnaik, Regional Manager, Diamond and Jewellery Business, Asian Region, ABN Amro Bank. ABN Amro is the largest lender to the Indian diamond industry.

The aggregate exposure of all the banks in India that are lenders to the diamond industry, stands at $3.1 billion (Rs 13,471 crore), he said.

For 2005-06 ABN Amro had an approved limit of Rs 3,000 crore of lending to the diamond industry, of which Rs 2,200 crore had been lent so far, Mr Patnaik added.

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