SBI said it cleared a $1 billion loan for the Tatas in just 5 minutes. This has placed the bank it much ahead of competitors on overseas M&A deals
Bank chairman says quick decision-making has placed bank ahead of rivals
NEW DELHI:State Bank of India (SBI) on Tuesday said it cleared a $1 billion loan for the Tatas in just five minutes.
This philosophy of quick decision-making has placed the bank it much ahead of competitors on overseas mergers and acquisitions (M&A) deals, the bank said.
According to SBI chairman O P Bhatt, “SBI has become so nimble that when Tata-Corus did not get that last bit of $1 billion dollar funding, we sanctioned in five minutes... Recently, we have done Rs 12,000 crore. No bank in the world can do this kind of funding in 5-10 minutes. We have been doing it.”
SBI, which has evinced interest in the overseas acquisition of a big entity, is already the highest contributor on foreign asset building and M&As during the first quarter this year and would remain so in the next quarter, too.
Asked if he feared that the fast-growing private sector lender ICICI Bank could replace it as the top player in the arena, Bhatt said: “I am not apprehensive about the rise of ICICI Bank...its CEO K V Kamath has gone on record that he is not competing with SBI and that he does not want to overtake SBI. He is the same person who was saying that he will overtake SBI.”
On reports that ICICI Bank had overtaken SBI on foreign asset building recently, Bhatt asserted that SBI was ahead of the competitors.
“Even in terms of foreign assets, ICICI Bank has not overtaken us. It has not overtaken in absolute terms but in percentage terms,” he added.
Referring to the slew of measures taken by SBI during his tenure as chairman, Bhatt said: “As such, we are the market leaders and the latest initiatives would only enhance our leadership position. Till some time back, people did not know we were in this business (M&A deals). Now, they know and are coming to us for funding requirements.”
The bank, which boasts of the largest network of branches in India, said it was ahead of any other institution in the country in terms of funding for infrastructure sector. SBI has sanctioned loans in excess of Rs 38,000 crore so far, he said.
“We are larger than any other bank or financial institution, including IDFC, which was especially created for infrastructure funding. There also, we are playing the lead role and would like to continue as the leader,” he said.
When asked about raising funds for infrastructure finance, Bhatt said it was not going to be a problem even when the requirement is over $500 billion in the next five years.
The gestation period of infrastructure projects is long, generally over 6-7 years, but there is no dearth of funds, he said.
Bhatt, however, sounded a word of caution, saying that though liquidity would not be so much of an issue, funding to infrastructure projects could be constrained by prudential requirement.
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