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Our Bureau

SBT likely to be the first to tap market

Bangalore , May 28

State Bank of India has ruled out any immediate hike in home loan rates from current levels despite RBI's increased risk perception real estate sector.

Speaking to presspersons , the SBI Chairman, Mr A.K. Purwar, said, "the increase is made on changed risk perception, but need not necessarily mean increase in rates." The RBI had hiked the risk weightage to 150 per cent on May 26, on real estate lending barely three weeks after the last increase.

Consolidation

Referring to consolidation, he said, that the SBI group was already "virtually consolidated." He said this size gave the SBI group economies of scale. But, he said the State Bank of Travancore was likely to enter the market. He added that SBI was looking for a greater international presence in future. SBI itself was expected to raise about Rs 6,000 crore through a tier two bond issue during the current year for meeting its resource requirements during the year.

Syndication

He said that that group was also looking for a greater presence in the international syndications market. For the purpose, the SBI has already set up a separate unit for international syndications through SBICaps. Referring to domestic syndication, he said, SBICaps had syndicated Rs 10,000 crore for domestic corporates. This year, SBICaps intended to syndicate at least Rs 20,000 crore. These included funds for utilities, such as power and infrastructure entities.

SBI Life Insurance

Referring to SBI Life Insurance Company, a joint venture with Cardiff SA of France, Mr Purwar said, the company had made "small profits for the last financial year." This year, the bank would sustain the growth of the insurance venture. For this purpose, the bank was prepared to pump in more capital " if needed." SBI Life currently has an authorised capital of Rs 500 crore.

More Stories on : Housing Finance | Public Sector Banks | State Bank of India

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