SBI to float holding company; shortlists 3 for general insurance JV
03 Aug 2007
Mumbai: State Bank of India (SBI), the country''s biggest lender, is all set to form a holding company for its general insurance venture. The new entity, to be valued at $5 billion to $7 billion, will eventually be listed in the stock exchanges.
The holding company, expected to be formed within the next 2-3 months, would also be the holding company for SBI Life and SBI MF the bank''s life insurance and mutual fund units, respectively.
SBI currently holds majority stakes in a life insurance venture with Cardiff of France and an asset management company with Societe Generale.
The general insurance company, however, will start operations later this year with a foreign partner holding a maximum of 26 per cent equity stake.
SBI
has short-listed three foreign partners for its proposed
general insurance venture, O. P. Bhatt, chairman and managing
director, said on the sidelines of banking conference
in Kolkata.
Strategic investors in the general insurance joint venture
might also hold a part stake in the holding company, he
said.
SBI, meanwhile, is also planning to create a separate company for management of pension funds, he said, adding the bank would require funds to the tune of Rs15,000 crore for lending operations.
SBI
is expecting a 25 and 20 per cent growth in credit and
deposit respectively during the year.
Indian banking sector may not be in a position to finance the entire amount needed for the development of the country''s infrastructure sector, estimated at $300-400 billion.
Bhatt said that the issue of restrictions of government holding in PSBs would have to be debated, adding that there is potential to do away with it. "This has to be made to happen, and there is a potential to make it happen," he said.