State Bank of India will restrict the consolidation process to its five associate banks in the present scenario, said Chairman Pratip Chaudhuri.

In the last few years, India’s largest bank has merged two of its associate banks — State Bank of Saurashtra and State Bank of Indore — with itself.

“There is nothing on the cards (consolidation) unless we are very comfortable in terms of capital,” said Chaudhuri.

On the proposed Rs 8,500 crore rights issue, the SBI chief said next week the bank will have detailed consultations with the Ministry as they have to subscribe to their portion of the issue. Some amount would come from minority shareholders so the bank is assured that it will be well off in terms of capital.

In the last meeting, the Asset Liability Committee decided not to change the base rate. A decision on revising the base rate will be taken in the first week of December by the panel once the November net interest margin numbers come in. The SBI Chairman said that reports of Kingfisher Airlines’ group company’s (United Spirits) capital raising plans cannot be the basis for taking a view on the financially troubled airlines. “Kingfisher Airlines as a company has not given us any information on the infusion of capital so far,” Chaudhuri said.

On the home loan segment, the bank has increased its daily average loan disbursement to Rs 150 crore as against Rs 65 crore per day last year. Home loan interest rate at 10 per cent is among the lowest in the industry and the Chairman claimed that it was not a loss-making segment.

“We expect about 30 per cent growth in our home loan segment, increasing our portfolio from Rs 1.07 crore to Rs 1.35 crore. Also, we have a migration of about 25 per cent to SBI from other banks,” Chaudhuri said. However, corporate loan growth is tepid. On the deposit rates, SBI chief said that the rates “cannot go below the postal deposit rates”.

(This article was published on November 24, 2012)
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