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C.R. Sukumar

Hyderabad , March 18

WITH an eye on the global top 10 list, State Bank of India (SBI) is charting out a growth strategy that includes domestic and overseas acquisitions and also a merger of seven SBI associate banks, its Chairman, Mr A.K. Purwar, has said.

The bank has appointed a strategic group to monitor the acquisition opportunities.

"One of the overseas acquisitions can be expected very shortly. We are closely looking at banks in the Asian region," Mr Purwar told Business Line here on Friday.

SBI is placed 80th at present among the global banks.

Stating that the bank would essentially look at takeover targets that were strong in retail banking space, Mr Purwar said SBI was also "open to domestic acquisitions." However, he said, the domestic targets need not be only in the space of retail banking.

As a part of the overseas growth, the bank has plans to set up branches in several developed nations and representative offices in the West Asia and African countries early next fiscal, he said.

On the future of associate banks, Mr Purwar said, "The best course should be merger of associate banks with SBI. We are already on the verge of completing virtual merger with the help of common technology platforms and core banking solution. The legal merger is just a matter of time. We are waiting for the appropriate time for the merger."

According to Mr Purwar, SBI needs to raise capital not just to meet the Basel-II norms. The need arises more due to the unprecedented growth in assets, he said. "Keeping this in view, SBI is planning to tap the market sometime during second or third quarter of this year to raise the capital. Tentatively, we plan to raise capital to the tune of Rs 3,000 crore. However, we expect to finalise the exact capital requirements by the fiscal-end. We may also consider raising funds partially in the overseas market."

Mr Purwar said the bank planned to spend Rs 600 crore- 800 crore per year on technology initiatives in the next few years. Currently having implemented core-banking solution in 18,000 branches, the bank proposes to implement the solution in all the associate banks by September this year and at least 4,000 SBI branches by next fiscal-end.

The bank plans to cover around 9,000 of its branches and altogether 13,600 branches of the group through core banking solution by March 2007, he said.

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