SBI keen on trying out newer lines

Kolkata: State Bank of India (SBI) is planning its maiden foray into the venture funding business. Slightly cautious, perhaps, the bank might structure its business a little differently. It may tie up or fund existing venture capitalists to further on-lend capital.

The country’s biggest commercial bank is also toying with the idea of wealth management, an area so far considered a stronghold of private and foreign banks.

The bank has already floated a subsidiary under SBI Caps to deal with venture capital. But the company is yet to take off as the right model and structure has not been finalised.

Top SBI officials confirmed to DNA Money that the bank was keen to develop these two areas of business over the next few months.

“But with no direct expertise in the business of venture capital, we have to tread cautiously. But the potential is enormous and the need for capital is high with diversity in business and entrepreneurship,” said an official.

“The bank is yet to think of a model, but loosely put, the bank may fund existing venture capitalists who have a fair idea on the need for capital requirement. Some foreign association may also come in terms of tie-up as well,” the official added.

The bank is said to be on the lookout for the right people to handle this venture, which may be divided into various segments.

SBI is also activating itself to get into wealth management, an area where private and foreign banks have a huge expertise, while nationalised banks have traditionally kept away. Carving out a space for itself in this segment will thus be a challenge for SBI.

Once these two forays have been made, however, SBI would have few new lines of financial business to chart, barring general insurance and pension management.

While general insurance is not on the cards now, pension business will have to wait till the pension regulations are in place.