State Bank of India plans to launch a $300 million floating rate note (FRN) issue early next year to meet its long-term funds requirement.
SBI chairman M S Verma told Business Standard in an interview that the FRN issue would partly finance the banks project funding activities.
Project finance from our side would be around Rs 3,000 crore, primarily in telecom and power, and the floating rate note issue would be resorted to as and when we require the money, he said.The FRN issue would also mark SBIs presence in the international market, he said, adding that there could also be more tranches later.
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On the proposed recast of the SBI subsidiaries, Verma said SBI was prepared to have some of the weaker subsidiaries merged with it while the stronger ones could become independent and tap the markets themselves. This is also one of the options being considered by the government for recasting the SBI group.
Reacting to Bank of Baroda chairman K Kannans reported statement of wanting to lend to corporates below the declared prime lending rate (PLR), Verma said there could be a complete breakdown of discipline if banks quoted any rate. Rates are fine, but we must also keep the prudential requirements in mind, he said. Explaining the fallout of the restructuring by McKinsey and Co, the SBI chairman said the deputy managing directors were also functioning as chief executives of business groups. He said the bank was keeping a close watch on the performance of all its subsidiaries, with whom it had signed memoranda of understanding (MoU).
SBI has invested Rs 800 crore in these subsidiaries.
He said SBI Capital Markets would function as the chief reference point for the banks `Investment Banking Group, with SBI Cap then passing on the requirements of clients to either SBI Gilts or SBI Securities.