Banking News - Latest alerts - Part II

SBI says can raise upto Rs 120bn following bill amendment
 
The proposed move to bring down government holding in State Bank of India (SBI) to 51 per
cent from about 59 per cent now could help the lender raise around Rs 120bn, a top SBI
official said here today. "We now have a headroom to raise Rs 120bn," SBI Chief Financial
Officer, S S Ranjan said when asked to comment on reports that the government has cleared
a bill that seeks to lower government equity in the public sector bank to 51 per cent. The
government is the largest shareholder of the banking behemoth with a majority 59.41 per
cent stake. With the amendment to the SBI (Amendment) Bill, the government can now
reduce its ownership in the bank by around eight per cent to up to 51 per cent. The capital
infusion can either happen through a rights issue or by way of other financial instruments.
Insurance companies currently own 11.23 per cent stake in the bank while the FII holding, as
at September 30, stands at 9.87 per cent. (Business Standard)

SBI gets government nod to acquire State Bank of Indore

The government has given approval to State Bank of India (SBI) to initiate the process of
acquiring one of its associate lenders, State Bank of Indore, the junior finance minister told
lawmakers on Friday. SBI, India's largest bank, has already acquired one of its subsidiaries -
State Bank of Saurashtra. It has six other associate banks and plans to take over all associates
eventually. "SBI has already initiated the process," Namo Narain Meena told the lower house
of parliament in a written reply. (Reuters)

SBI General Insurance to be operational by H1 2010

The State Bank today said its general insurance foray, in a joint venture with Insurance
Australia Group (IAG), will commence operations in the first half of next year. Both the
companies have together invested over Rs 6.5bn into the venture. While SBI has put in Rs
1.11bn towards its 74 per cent share in the venture, IAG has invested Rs 5.42bn for 26 per
cent of the share capital of the joint venture, SBI General Insurance, SBI said. "The general
insurance subsidiary is expected to commence commercial operations in the first half of the
calendar year 2010, subject to final approvals from the Insurance Regulatory and
Development Authority (IRDA)," the SBI filing said. (Business Standard)

Deepak Parekh to step down as HDFC chief in January

HDFC's Chairman and Chief Executive Officer (CEO) Deepak Parekh will step down next
month after serving the housing lender for 31 years –– a period that saw the lender become
the numero uno in housing segment. The reshuffle will see Parekh continuing as nonexecutive
chairman of HDFC, the holding company of its group ventures including HDFC
Bank. Parekh is widely consulted by the government on a wide range of issues of national
importance and has been a member of various government appointed committees and
advisory panels, which includes financial services, capital markets and infrastructure sector
reforms. (Business Standard)

United Bank of India gets government nod for IPO - CMD

United Bank of India has received approval from the Indian federal government for an initial
public offering of its shares, chairman and managing director S. C. Gupta said on Friday. The
state-run bank plans to raise 3.5-4 billion rupees through the issue, which will result in a 15.5-
16 percent dilution in the government's 100-percent shareholding, he told Reuters over
telephone. "Right now we are in the process of preparing the draft and finalising the arranger
and we hope to hit the market by January-end or the first week of February," he said.
(Reuters)