SBI proposes Mamp;A financing

BHOPAL, AUG 5: State Bank of India SBI proposes to finance mergers and acquisitions Mamp;As once the requisite regulations are frame...

BHOPAL, AUG 5: State Bank of India SBI proposes to finance mergers and acquisitions Mamp;As once the requisite regulations are framed, its chairman GG Vaidya said here today. SBI has taken the initiative through SBI Capital Markets Ltd SBI Caps to address the various issues and work out a broad framework for consideration by the concerned authorities, Vaidya told the bank8217;s 44th annual general meeting.

8220;There is ambiguity in the extant regulations and time is opportune for the enabling mechanism to be put in place to facilitate healthy takeovers and consolidation efforts, which will be the buzzwords in the coming years,8221; he said. While dwelling on corporate governance, Vaidya said capital adequacy requirements will force Indian banks to tap capital markets including the global markets frequently. Adoption of more transparent disclosure standards uniformly for the Indian banking industry, broadly on the pattern of the US GAAP standards, would go a long way in inspiring confidence of the global investorin the Indian banking system, he said.

It is actively considering adoption of GAAP standards to enable itself to access overseas markets, whenever required, on the strength of its balance sheet, Vaidya stated. SBI would now like SBI Cap to grow on its own and shape its strategies to face the increasing competition and therefore, was contemplating to dilute its holding in the investment bank. Dilution of the holding in SBI Caps began with the entry of Asian Development Bank as a stakeholder and would now be carried forward, he informed. SBI Caps has plans to open a broking division to expand its products range.

Insight:

Small investors unhappy

MUMBAI: Small investors were unhappy with the SBI8217;s move to hold the AGM in places like Bhopal. 8220;Majority of SBI shareholders are based in the western region, especially Mumbai. It8217;s not clear what really prompted SBI to hold the AGM in Bhopal,8221; said a shareholder.

8220;Most of the small shareholders can8217;t afford to go to Bhopal. It8217;s notonly time-consuming, I8217;ve to shell out money for travelling and lodging. Does SBI want shareholders to keep away from the AGM? Is it worried about uncomfortable questions on non-performing assets NPAs and declining profits,8221; said another shareholder.