Srei, Toubro Infotech keen to pick up Sikkim bank

Srei International Finance and Toubro Infotech and Industries have expressed their interest in taking over State Bank of Sikkim (SBS) "" the only bank that does not fall under the purview and control of the Reserve Bank of India (RBI).

SBS, which was put on block and was looking for a joint venture partner for revival, was equal in stature to central banker for Sikkim and is fully owned by the state government of Sikkim.

At present it is not a scheduled bank, but is likely to become once the divestment is completed.

Saddled with huge non-performing assets, the State Bank of Sikkim has been in the red for a long time and successive attempts to turn the bank around have failed. For the year 2001-02 the bank incurred a net loss of Rs 1.99 crore.

The Kolkata-based Uco Bank also had a 20 per cent stake in SBS. However Uco Bank reduced its stake to less than five per cent and is in the process of offloading its entire stake.

The SBS divestment is likely to gather momentum once the general and assembly elections are over.

Sources also said that the state government was keen on divesting its controlling stake by offloading around 51 per cent in favour of a private party.

Both the companies have confirmed their submission of interest for partnership in the SBS divestmet after the state government invited expression of interest.

SBS's jurisdiction is restricted within the state and it has around 18 branches across the state.

"We are interested in SBS and are ready to acquire a controlling stake in the bank if offered. We have projects lined up in Sikkim "" and are also planning for a five star hotel in the state, " said officials from Toubro Infotech.

Sources connected with Srei said they had applied to offer turnaround strategy for SBS. The government has asked for a JV partner but has not mentioned the quantum of stake sale by it.