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SBI may raise Rs50,000 crore for expansion plans

SBI may raise Rs50,000 crore for expansion plans
PTI
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First Published: Tue, Jun 26 2007. 06 10 PM IST
Updated: Tue, Jun 26 2007. 06 10 PM IST
Mumbai: State Bank of India (SBI), country’s largest lender, on 26 June said it is likely to raise Rs50,000 crore capital for its expansion plans in domestic and overseas markets in the next three years and proposed to form a holding company for its non-bank subsidiaries.
“In the next three years roughly Rs50,000 crore of capital may be needed by SBI in addition to normal plough back of profits to meet our challenging business growth and expanding role overseas,” SBI Chairman O.P. Bhatt told the Annual General Meeting here.
SBI is also planning to float a subsidiary to manage pension funds under the New Pension Scheme for government employees, he said.
To achieve better financial planning and reduce the demand on SBI for capital infusion in some of its subsidiaries, Bhatt said, “we are considering setting up a holding company for our non-banking subsidiaries.”
To begin with, the bank’s shareholdings in the asset management and insurance companies would form the holding company.
The holding company can be listed separately and capital raised for the use of the two companies, he said adding “this will enable the bank to capture the value that was available in these businesses.”
The bank has been shortlisted by PFRDA as one of the four players, he said adding pension funds offered a huge business opportunity as only 11% of the current workforce of 45 million is covered by employment benefits.
In some countries pension funds assets are as large as 65% of GDP.
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First Published: Tue, Jun 26 2007. 06 10 PM IST
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