The Hindu Business Line : Aircraft lease financing holds potential, says SBI MD

THE State Bank of India Managing Director, Mr T. S. Bhattacharya, while stating that his bank has been extending finance support to the aviation industry, conceded that the exposure was "very little", without quantifying the sums advanced.

"We have been extending financial assistance to Air India and Indian Airlines from 1982. We are financing Jet Airways too, albeit in a small way. We have just signed a proposal with another private airliner, but the exposure still is not much," he told Business Line.

Mr Bhattacharya was here on Friday to receive the `Personality of the Decade Award' conferred on him by the KG Foundation.

Speaking on the sidelines of this function, he said aircraft lease financing would be an attractive proposition, provided the "lease rental is free of income-tax". "Worldwide the lease rental has tax advantage, but not in India. Because of this, we have stopped advancing to aircraft leasing business space," he said.

While suggesting the need for effecting certain changes in the tax laws to enable this financing option, Mr Bhattacharya said, "the opportunity is huge."

"SBI, however, has no difficulty in extending term loans for outright purchase deals," he said and added that the bank's arrangement with the EXIM (Export Import) Bank in the US, Japan, the UK, France and The Netherlands would facilitate the purchase.

Reverting to the present, he said, "The focus is on the Core Banking Solution (CBS), because of its felt need in the market. We are proposing to sell all our products on the CBS platform. The range is huge. And we have also perceived the need for an image makeover - a brand building exercise."

To a query on size, Mr Bhattacharya said, "Size has its advantages and conflicting disadvantages too. Just take a look at our business volumes. While we have the ability to meet the physical targets set by the Government on (say) advances to the agriculture sector (18 per cent) or even the small and medium enterprises target of 12 per cent, it affects our achievements and functions, because the volumes are huge."

SBI may announce 3rd overseas buy tomorrow

STATE Bank of India is expected to announce its third overseas acquisition on November 7.

While the bank's Managing Director, Mr. T.S. Bhattacharya, refused to divulge details about the proposed acquisition, he merely indicated that it was a bank in the Asia region.

The acquisition is part of the bank's global expansion plans.

SBI recently acquired a 76 per cent stake in Giro Commercial Bank in Kenya for $7 million.

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