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Rukmani Vishwanath

Mumbai , Nov. 18

STATE Bank of India is gearing up to flag off commercial banking operations in China shortly.

Mr A.K. Purwar, Chairman, SBI, told Business Line that the bank had written to the Chinese Government for permission to upgrade its representative office in Shanghai, and is waiting for regulatory approvals.

"China offers tremendous business potential and we are particularly looking to tap the Indo-Chinese trade segment, corporates, exporters and importers etc," said Mr Purwar.

This is another move in line with SBI's aggressive expansion plans in the near future. In the next two years, the bank expects its international business to contribute at least 10 per cent to its profits. SBI also has plans to set up a domestic branch in the Mauritius shortly, where it already has an offshore banking unit.

The bank is looking to set up operations in Sri Lanka shortly and is also in the process of setting up additional branches in Bangladesh, Nepal etc. "We have been in Bangladesh for long , earlier we had only one branch there. But we found that it was a very profitable business, so we set up a second branch recently and will soon set up a third.

"Similarly, Nepal has around 10 branches and we intend to add more", he said. Currently, SBI has around 50 offices internationally across 28 countries. Plans are underway to take it to 80 offices across 38 countries in around two years time, he said.

SBI also maintains correspondent banking relationships with 593 `top-ranking' banks in 127 countries.

The bank also recently formed a joint venture subsidiary with Canara Bank in Russia, `Commercial Bank of India,' which is expected to start operations shortly. SBI is expected to hold 60 per cent in the joint venture, with Canara Bank holding the remaining 40 per cent.

During the last financial year, the bank wound up its representative offices in Jakarta, Sao Paolo and Vietnam, as part of restructuring its representative office network.

For the financial year March 31, the bank's foreign offices made a net profit of Rs 109.90 crore, up from Rs 3.08 crore in the corresponding period, the previous year. SBI's deposits outside India amounted to Rs 7,25,73,084 crore, as compared to Rs 8,01,13,313 crore in the corresponding period, the previous year. Borrowings outside India, amounted to Rs 9,30,36,194 crore as compared to Rs 9,32,39,446 crore in the previous year.

SBI, which has already set up an offshore business unit (OBU) at SEEPZ, plans to set up another three OBUs in Vizag, Haldia and Surat shortly. Mr Purwar said, "one of the advantages in setting up OBUs where we already have a branch, like in SEEPZ, is that we don't have any major costs involved. We already have an existing customer base we can tap into".

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