SBI to restructure its investment banking arm SBI Capital Markets
SBI Capital Markets and its unit PASF Group are currently involved in project advisory, loan syndication, refinancing, debt resolutions and other investment banking services
Mumbai: State-owned lender State Bank of India on Tuesday said its investment banking arm SBI Capital Markets Ltd (SBICAPS) will no longer provide debt syndication and debt resolution services.
SBICAPS and its unit Project Advisory and Structured Finance (PASF) group are currently involved in project advisory, loan syndication, refinancing, debt resolutions, mergers and acquisitions and other investment banking services.
In April, the Reserve Bank of India had pointed out a conflict of interest between the bank and its investment banking arm with regards to the debt syndication and restructuring services, according to an Economic Times report.
“In view of duplication of processes resulting in delays, as also certain regulatory concerns, it is decided that the activities like debt syndication (both greenfield and brownfield projects /refinancing for private sector customers) and Debt resolution mandates taken from private sector companies offered by PASF, SBICAPS, are discontinued. As in the past SBI, will continue to provide support and assistance to all its customers on an ongoing basis,” the bank said in its statement to stock exchanges.
SBICAPS, however, will continue to provide other investment banking services.
In May, SBI chairman Rajnish Kumar said the bank was looking to bring in a partner in SBICAPS by diluting minority stake, PTI reported. Kumar had also mentioned that the bank was looking at overlaps between SBI and SBICAPS and wanted to make the latter a pure investment bank.
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