State Bank of India plans to list some of its subsidiaries on the stock exchanges and sell non-core assets to meet higher capital requirement that will kick with implementation of Basel-III norms from March 2019.
“For us, we have a number of non-core assets which we are looking at monetising. We also have very successful subsidiaries which we have not listed. So, we can look at those as well,” SBI chairman Arundhati Bhattacharya said at an Assocham seminar.
State-owned banks would need Rs 1.8 lakh crore of capital to meet Basel-III norms, of which Rs 70,000 crore will be provided by the government.
The bank’s subsidiaries include: SBI Capital Markets, SBI Funds Management, SBI Pension Funds, SBI Cards and Payment Services, SBI DFHI and SBI Global Factors. The bank has already announced plans to lower its stake in insurance ventures — SBI Life Insurance and SBI General. In its life insurance venture, SBI proposes to sell up to 10 per cent stake, while it may sell about 23 per cent in case of its general insurance company.
She said SBI would launch a trade platform along with the SIDBI and NSE for discounting of bills by traders in next one year. The initiative would not only help the traders receive timely payments but also help the bank to reduce the Non performing assets.
Bhattacharya said the bank also plans to set up a credit engine for dealers who sell on online firm Snapdeal. The bank will launch the credit engine on January 15. On the external risks that India faces from an economic slowdown in China, she said the Communist country’s economy will not have a hard landing as it has sufficient forex reserves to capitalise all its banks. “…China has enough cash reserves and resources and they will not have a hard landing in this. And unlike India their speed of taking action is very fast,” she said.
On financial inclusion initiative, she said SBI is opening 70,000 accounts per day through 54,000 Customer Service Points, operated through channels like fertiliser dealers or grocery stores. These CSPs are now being equipped to sell banking, insurance and pension products through training sessions.
‘Basel-III norms not meant for India’
New Delhi: State Bank of India chairman Arundhati Bhattacharya on Tuesday said that stringent Basel-III capital norms were not really meant for the Indian banks, as they follow universal banking model and do not have many complicated products like in Western countries. “Basel template as it was created was really and truly not meant for a country like India which has plain vanilla banking. (In the) West, they have the investment led model. They have got many, many complicated products,” she said. ENS