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State Bank of Mysore could raise funds this fiscal through issue of tier-I and tier-II bonds, according to a top official of the bank.
The bank raised Rs 583 crore through a rights issue last fiscal, and “we will raise funds by issuing tier-I and tier-II bonds this fiscal to augment growth,” said Mr Dilip Mavinkurve, Managing Director, State Bank of Mysore.
However, he did not divulge further details, as the bank was yet to get board approval for this fiscal's business plans. According to him, the bank was targeting over 20 per cent credit growth in the current fiscal.
More branches
State Bank of Mysore launched retail sales of gold coins on Monday, which it plans to extend to all its branches soon. “We are planning to start with 100 branches, and will soon extend it to all branches,” said Mr Mavinkurve. The bank expects to sell 100 kg of gold this fiscal.
“The sizes of gold coins are such that they will suit all pockets — from 2 gm to 50 gm. These will be sold at international prices, which alter on a daily basis,” he added. Information of the daily rates would be available on the bank's Web site.
“This will add to the non-interest income base of the bank, which also includes commission for cross-selling life insurance, general insurance, mutual fund and credit card products. These commissions and the little margin from the gold coin sale will help us make up a part of the losses we suffer due to the loss of draft commission,” he added. The bank has been losing 20-25 per cent of draft commission every year for the past few years, pointed out Mr Mavinkurve. State Bank of Mysore is the corporate agent for SBI Life for life insurance products, National Insurance Company for general insurance products, SBI Cap for mutual fund products and SBI Cards for credit cards.
Smooth merger seen
Speaking at the launch of retail sales of gold coins at State Bank of Mysore, Mr R. Sridharan, Managing Director, State Bank of India, said that the merger of the five associate banks with State Bank of India will benefit the group as a whole, adding that he expected it to be a smooth transition when the merger eventually happens.
“It's more restructuring than a merger or amalgamation. And when it happens, we believe that the group as a whole will benefit, and it will be beneficial to all — the banks, shareholders, customers and society at large,” he said. On when the merger of State Bank of Mysore with SBI would happen, he said that it was for the government of India to decide on “what is to be done”. He added that SBI has seen “complete acceptance” in the two mergers that have taken place so far — State Bank of Saurashtra and State Bank of Indore with SBI. “We are familiar with what to do and how to plan for a smooth transition,” said Mr Sridharan.
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