SBI zeroes in on Indonesian bank

Bank has zeroed in on Pt Bank Indomonex of Indonesia for a possible acquisition.

According to banking sources, State Bank of India (SBI) has had a few rounds of discussions with the management of the Indonesian bank, and the final decision is likely to be taken over the next few weeks.

SBI is eyeing the Indonesian bank for a possible acquisition as the local regulatory norms require a huge deployment of funds for setting up foreign bank branches.

"Under the current norms, a foreign bank needs around $300 million to set up branches there. In contrast, acquisition of a local bank works out cheaper," said a banker. However, the cost of acquisition is not known.

This will be SBI's fourth overseas acquisition. The premier state-run bank has embarked upon a series of international acquisitions to establish itself as a global player.

In February this year, SBI had picked up 51 per cent stake in Mauritius-based Indian Ocean International Bank Ltd. It has also acquired Nal Bank of Nigeria and Giro Commercial Bank of Kenya.

Following the stringent capital adequacy norms of the Central Bank of Nigeria, SBI merged its Nigerian subsidiary "" Indo Nigerian bank "" with Nal Bank. The merged entity will be a universal bank equipped with NAL Bank's experience in corporate/investment banking.

SBI, which has already set up branches in Sydney and Muscat, is currently in the process of bidding for Rupali Bank of Bangladesh. In addition to this, the bank is in the process of setting up branches in South Korea, Shanghai and Angola.