State Bank of India is keen to offload its stake in the National Stock Exchange (NSE) as part of the effort to realise value for investments and focus more on the core areas of business for the financial powerhouse, chairperson Arundhati Bhattacharya has said.
"The Department of Financial Services has said to all public sector banks to liquidate properly the none-core Assets, so that the investment money comes back to banks with profit," the chair told ETV in an interview.
"The bank's capital will be strengthened. We've some investments in the NSE -- when it started. Now, NSE has become a large institution. So, we want to get the value of our investment," said the banker, who has been with India's largest commercial lender for 37-38 years.
"I don't know what the amount would be. We like to disinvest, because we feel it's the time to get back the value of our investment." The bank has a 15-percent stake in NSE and the market value is estimated at nearly $1 billion.
With the finance ministry getting ready to table the next national budget in February next year, Bhattacharya also had her wish list and spelt out some of them during the long, free-wheeling interview to ETV head Jagdeesh Chandra.
"We've given them many proposals to include in the budget. Don't know which one will be accepted. I can tell you one or two," she said.
The first was on the bankruptcy code in which Bhattacharya said there were some small issues."If tightened, then it would've been helpful for our lenders," said the banker, referring to the draft code circulated by the finance ministry.
She also said there was concern over the current tax deducted at source norms due to which senior citizens were facing difficulties. "We've asked them to see on the TDS issue, as there're many senior citizens facing difficulties. If the limit is increased then it will be helpful to them."
The third area of the budget wish list pertained to the housing sector "We also requested them to see on how to give relaxation in loans on housing sectors," Bhattacharya said, but making it amply clear that her institution was not in favour of teaser loans.
In any case, she said, a bank assesses the lendee based on the capacity to pay a certain interest. Once that is settled, the person may be offered a rebate of 200 basis points or so for say two years, but after that the regular rates apply.
"So, where's the teaser in this? We've just made first two years easier. But, we've assessed the capacity of loan at 10 percent. So, it's not teaser. If a person gets less interest on first two years, then after two years the earning capacity would have increased."
