• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books
• Gallery

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Mr O.P. Bhatt, Chairman, State Bank of India, and Mr Jiban Goswami, Director, State Bank of Mysore, at the State Bank of Mysore’s annual general meeting in Bangalore on Thursday. — G.R.N. Somashekhar

Our Bureau

Bangalore, May 28 Banking behemoth State Bank of India together with associate banks has targeted infrastructure lending of over Rs 1 lakh crore this financial year.

Speaking to reporters here today, the SBI Chairman, Mr O.P. Bhatt, said, “We are stepping up infrastructure lending this year along with our associate banks.”

Last fiscal, SBI and associate banks advanced Rs 80,000 crore for infrastructure projects such as power plants and petroleum refineries.

The big ticket credits have made SBI and group one of the largest project financiers in the country, Mr Bhatt said.

“We will continue to focus in this direction.”.

The bank is evaluating about five proposals for funding through its venture capital division, he said. SBI’s infrastructure fund has a corpus of over $1 billion.

Mr Bhatt was in Bangalore to chair the annual general meeting of its associate bank State Bank of Mysore.

He said SBI was awaiting government decision on merging its associate banks, including SBM, on the lines of the erstwhile State Bank of Saurashtra. Mr Bhatt said, “It (the merger) is desirable, but a decision has to be taken by the Government.”

Referring to SBI providing guarantee to corporates, Mr Bhatt said, “Haven’t we become a global sized bank to provide such support?” He made it clear that SBI was prepared to offer more such guarantees.

However, SBI in the past has provided guarantees or standby support only on a back-to-back basis. This implied that guarantees would be fully secured.

Asked about further reduction in interest rates, Mr Bhatt said the bank was already lending at below the benchmark prime lending rate. “The BPLR is only a rate meant for fulfilling legal requirements. About 70 per cent of our lending is already below this rate.” He also said lending was not skewed in favour of large corporates.

“We have conveyed to our micro, small and medium-scale enterprise customers that the current 8 per cent fixed rate will remain for at least 2 years.” He added that lending rates could not be isolated from cost of funds.

He said credit offtake was beginning to improve. “The worst is behind us.” Besides, during the first quarter of any financial year, credit offtake remains low. Yet, he said, SBI and group banks have witnessed some buoyancy in the home loan offtake. He also dismissed fears of inflation in view of the high liquidity in the banking system. “If the liquidity is used for building productive assets, there is no cause for fear.”

More Stories on : Public Sector Banks | Credit Market | Infrastructure | State Bank of India

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line