The Department of Financial Services (DFS), a wing of the Finance Ministry, has sought an "immediate implementation of the reforms agenda".
The State Bank of India (SBI) has decided to shut six non-viable overseas branches in China, Sri Lanka, Oman, Saudi Arabia, France and Botswana by 2019, following directions from the Finance Ministry, DNA has learnt.
India's largest public sector bank has also decided to exit from non-core businesses in three years to improve its financial health. The plan is to divest the bank's part form different domestic companies including IL&FS, NSE, UTI AMC (UTI Asset Management Company), CCIL, CDSL, NSDL, SIDBI, Central Warehousing Corporation and STCI Financial Ltd. SBI hopes to get a profit of Rs 5,880 crore. It has invested Rs 1,312.13 crore in 55 companies to enable them to establish as financial infrastructure institutions.
The Department of Financial Services (DFS), a wing of the Finance Ministry, has sought an "immediate implementation of the reforms agenda". SBI met with top officials of "Bank of Baroda and Bank of India to identify geographies for consolidation of overseas operations".
Closing processes have initiated for Tianjin (China) and Jeddah (Saudi Arabia). These branches are expected to be closed by September 30, 2018. Branches in Muscat (Oman), Paris (France), Jaffna (Sri Lanka) and Botswana will shut by March 2019.
More than 10 other SBI branches are under review. Tel Aviv (Israel) would continue as "branch presence is necessary due to strategic reasons including bilateral trade relating to defence procurement".
Almost 11 SBI branches in (Manama) Bahrain, Ilford (United Kingdom), Gulshan (Bangladesh), Seoul (South Korea), Yangon (Myanmar), and California (USA) have "to be studied further" with different reasons.
In NSE, SBI has offered 1.29 per cent stake under OFS (Offer for Sale) for proposed IPO. NSE's IPO is likely to come in FY 2019. SBI assumes a sale price of Rs 915 per share for stake sale in the next three financial years.
Similarly, SBI also planning to exit from UTI AMC, a mutual fund, whose IPO could not hit the market in FY 2018 as LIC has not given consent.
To avoid conflict of interest, capital market regulator SEBI is planning a guideline on a cross-holding cap in a mutual fund. SBI is waiting for the guideline that may impact shareholding pattern of UTI AMC. Financial institutions like SBI, PNB, BoB and LIC have their mutual funds, and at the same time, hold 18.24 per cent stake each in UTI AMC.
DNA's Email to SBI did not elicit any response on the above issue yet.
Exit Plan for Overseas Branches
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