The Hindu Business Line : SBI to raise Rs 3,000-cr tier-II capital: Purwar

STATE Bank of India plans to tap the markets with subordinate debt of up to Rs 3,000 crore under tier-II capital. The move is to fund overseas expansion and forex requirements, according to its Chairman, Mr A.K. Purwar.

SBI has drawn up plans to expand its overseas operations by opening more branches and acquiring banks in the Asian and African markets.

A few months ago, the bank had acquired a Mauritius-based medium-sized bank.

"There are couple of acquisitions in the offing. We are already negotiating with them. We may announce the names of these banks anytime shortly," Mr Purwar told newspersons here on Saturday on the sidelines of a conference on microfinance, organised by the Centre for Analytical Finance of the Indian School of Business.

Responding to a query on whether SBI was planning to roll over the proceeds of India Millennium Deposits (IMD) of $ 5.5 billion raised in 1999-2000, Mr Purwar said, "It is not a question of rollover. We have a huge number of foreign offices and we require funds for our overseas operations. Our overseas operations will soon come out with some products, focussing on the IMD redemption. These could be deposit products, life insurance products or mutual fund products. It could even be mix of all."

Mr Purwar said SBI would look at tier-II capital issue of up to Rs 3,000 crore, immediately after taking on record the second quarter results in October. "Our first quarter results have been very good. We want to look at the tier-II capital issue only after the second quarter results so that we can decide on the exact size of funds requirement."

Admitting that there were lot of uncertainties in the global market on the interest rate front, Mr Purwar said it would also impact the situation in the Indian market. However, he said, "The interest rates in India could be stable only in the short term. It is difficult to comment on the medium to long-term scenario.

"While I wouldn't say that the interest rates would go up in the medium to long-term, I would say that they are unlikely to go down further."

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