The Hindu Business Line : “SBI Chicago unit should cater more to local credit needs”

NEW YORK: A US government body created to restore confidence of the public in the country's banking system feels that Indian lender State Bank of India's (SBI) Chicago unit has to improve to meet the local credit needs.

The Federal Deposit Insurance Corporation (FDIC) has concluded that SBI's Chicago branch needs to improve its compliance with Community Reinvestment Act. The Act is aimed at encouraging insured banks and thrifts to meet local credit needs, including tho se of low and moderate income neighbourhoods.

Moreover, the activities should be consistent with safe and sound operations. In the list of banks evaluated for compliance, FDIC has given the rating 'Needs to Improve' to SBI Chicago, in April 2009, according to the latest data available with the agen cy.

Out of the 18 banks rated in the Chicago region, the FDIC concluded that only SBI needs to improve its activities in terms of catering to local credit needs, while 15 of them were evaluated as ‘Satisfactory’ and two were said to be ‘Outstanding’.

Since 1990, the government has made it mandatory for the FDIC to publicly disclose the evaluation and rating for each bank or thrift that undergoes a CRA examination.

The FDIC was established in 1933 to restore public confidence in the nation's banking system. The Chicago and New York branches are members of the FDIC. Currently, SBI has nine branches in the US. - PTI

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