SBI plans to raise $2 bn, look at retail lending overseas

SBI plans to raise $2 bn, look at retail lending overseas

The country's largest lender, State Bank of India (SBI), is set to raise $2 billion, including 500 million euros from overseas market, in tranches by the end of this financial year. The money is being raised to fund the expansion of the bank's international operations.

During 2009-10, the bank had raised $750 million for five years under the bank's medium-term loan programme through its foreign offices.

P Chaudhuri, deputy managing director and group executive (international banking) of SBI, said though a major chunk of the amount would be raised in US dollars, the bank would access markets like Japan and Korea and also a few euro markets to raise the amount.

"We want to diversify investor base for our overseas issue," he said,.adding that the quantitative easing by the US Fed last week has brought down overseas borrowings rates. However, he didn't disclose the timing and other details of the fund-raising plan. Click and Apply for SBI home loan and choose best deals and offers.

The bank is mobilising larger resources to become a bigger player overseas by having exposure in long-term loans, securities and bond markets, said Chaudhuri.

Also, the bank, which has been focusing mainly on wholesale banking, wants to foray into retail lending in overseas markets, said Chaudhuri.

"On an experiment basis, we have lent a sum of $50 million through retail lending in Singapore in the last one year. After achieving success in Singapore, we plan to expand our retail lending operations in countries like the UK and the US, said Chaudhuri.

Initially, the focus would be on increasing the share of retail deposit products and then move to home and auto loan products and provide value-added services such as insurance and mutual funds, besides cross-selling products, said Chaudhuri.

In a bid to build a supporting system from manpower point of view, the bank is in the process of recruiting specialised officers up to the level of a chief manager, numbering around 50 to 100 over the next one year in the overseas markets. "We have already started recruitment from the local markets," said Chaudhuri. Despite volatile global market conditions, the bank's foreign offices have maintained comfortable liquidity positions, he said.

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