SBI plans to hike overseas revenuesOctober 15th, 2008 - 10:18 pm ICT by IANS
Dubai, Oct 15 (IANS) India’s largest commercial bank State Bank of India (SBI) is targeting to increase its revenues from overseas operations from the current 10 percent to 25 percent.“From our foreign operations we get 10 percent of our revenues,” Praveen Gupta, SBI’s regional head and chief executive for the Middle East and North Africa (MENA), said in the course of a media interaction here.
“We want to take this up to 25 percent in the next five years,” he added.
According to Gupta, SBI is aiming to upgrade its current Gulf operations, which are largely focused on remittance services through tie-ups with local exchange houses, to full-fledged commercial and retail operations.
There are over 4.8 million expatriate Indians in the Gulf.
His comments came even as the bank acquired an upgraded licence for its operations in the United Arab Emirates (UAE) from the Dubai Financial Services Authority (DFSA).
SBI, which started its operations in the UAE with a branch under a Category 4 licence in January 2007, has now acquired a Category 1 licence, which will allow it to offer corporate credit among other things.
“The new licence will allow us to offer corporate credit both syndicated as well as bilateral,” Gupta said.
According to DFSA terms, SBI’s branch at the Dubai International Financial Centre (DIFC) here can provide credit in currencies other than the local currency, dirham.
The branch can also accept deposits in foreign currencies like the US dollar, euro and pound sterling.
According to Gupta, with the acquisition of the upgraded licence, the branch can now provide a whole range of corporate credit facilities such as working capital as well as trade finance, both fund-based and non-fund based.
“Along with these activities, we can also advise on and arrange investment deals and credit,” he said.
Though not allowed to get into direct retail operations in the local market, DFSA’s relaxed rules will allow SBI under its new licence to arrange investment deals and provide credit to any company for business purposes.
At the same time, the bank is also boosting its remittance services from the UAE, which is home to around 1.5 million Indians.
“A few years back, the bank decided to boost its remittance services from the Gulf through tie-ups with more exchange houses in the region,” the bank’s regional head said.
“So now, we have tie-ups with exchange houses like Emirates India International Exchange, UAE Exchange, Al Rostamani Exchange, Wall Street Exchange, Al Anasari Exchange and Al Fardan Exchange through which remittance services to India can be availed of.”
According to a World Bank report this year, India is the highest receiver of remittances from abroad.
Around 5.7 million Indians from across the world sent $27 billion as remittances in 2007 and the Gulf accounted for a large chunk of it.
Gupta said that the bank, which has an offshore commercial unit and a full-fledged branch in Bahrain and another full-fledged branch in Oman, has major plans for its Gulf operations.
“We have been given a licence to open a branch in Saudi Arabia and we expect to have a full-fledged branch in Jeddah there very soon,” he said.
SBI is among the very few banks in the world to be allowed to operate independently in Saudi Arabia. Most other major banks of the world in that Gulf country operate in joint ventures with Saudi entities.
With 15,118 branches in India and abroad and assets totalling $256 billion, SBI is the 57th largest bank in the world. The Indian government has a 59 percent stake in it.