SBI to enter market with a bang: Verma

Under Reserve Bank of India rules, banks can invest up to five per cent of their incremental deposits in the stock market. Since the aggregate deposit growth of the SBI was pegged at Rs 22,000 crore in 1997-98, it can invest up to Rs 1,100 crore in the equity market. He, however, refusedto divulge the bank’s exact commitment to the secondary market. "We are allowed to take positions both in the primary as well as the secondary markets within the five per cent limit. I cannot tell you the exact quantum of exposure in each segment. All I can say is that so far our equity market operations were less than Rs 100 crore. It will go up in a very big way," Verma said.

"You need to consider the turnover more than the exact quantum of investments. We will continuously churn the portfolio. Even if we sell the stocks and make fresh purchases two-three times, the turnover will be over Rs 3000 crore in the current fiscal," the SBI chief added. The bank is aiming for a profit of around Rs 100 to 150 crore from its planned equity market operations. "This is possible if we make the purchases at the right time. Now the Sensex is down and we are in the market. The index can only go up. Naturally we will make money," Verma said. The SBI decision to buy stock from the secondary market will go a long way torevive the sentiment, senior market analysts said.