State Bank of India launches debit card in Canada

State Bank of India (SBI) has launched its first debit card in Canada to raise its client profile here.

SBI is also looking at 84 locations globally to increase its association with international business, chairman O.P. Bhatt said Wednesday while launching the card here.

With seven branches across Canada, the State Bank of India-Canada (SBIC) - SBI's 100 percent-owned subsidiary - claims to have captured 65 percent of the trade conducted between that country and India.

The debit card will allow cash withdrawal at all cash vending machines at SBIC branches, and will be accepted in the US and around the world, including India where the SBI has 14,000 automated teller machines (ATMs).

SBIC clients will also get access to other ATMs around the world displaying Interac, Cirrus and Maestro symbols.

Additionally, the debit card can be used for purchases from merchant members in Canada, the US and other countries.

"The debit card will provide our clients with access to their money around the clock and around the world," said SBIC president and chief executive Arun Nagaranjan.

Unveiling the debit card at a gala dinner Wednesday night, Bhatt, who had flown in from India, said the launch completed SBI's product profile in Canada 26 years after it started operations here.

With the Indian economy growing at a rate of about nine percent and its exports and imports increasing by 20 to 25 percent annually, the SBI chairman said his bank was ready for increasing its global presence to meet demands of its business clients.

"Till last year, our international business contributed seven percent to our balance sheet, and about seven percent of our profits. This year, it went up to 10-11 percent. We want to raise this figure to 25 percent in the next five years," he said.

Bhatt said SBI had to expand outside India as 50 percent of business houses engaged in international business banked with it. Now it's very easy to get the information about cashback offers, reward points of sbi platinum credit card and also their hidden terms & conditions.

"Since we are the largest financial service provider in India, we have to go where our clients do business. We are looking at 84 locations around the world to increase our engagement with international business," he said.

Bhatt said SBIC, despite being a 100 percent-owned subsidiary, was actually a Canadian bank as it was incorporated here. "Thus, it enjoyed all the advantages of a Canadian bank and the advantages of its parent bank - the SBI," he said.

"The bank has already captured about 65 percent of the total trade between India and Canada. But given our advantages, we would like to capture a larger percentage."

The second area for business abroad, Bhatt said, involved capturing the non-resident Indian (NRI) segment - whether it is their remittances or their local businesses.

"Increasingly, SBI is offering facilities of banking transactions for NRIs to meet their requirements such as buying a house in India," he said.

The third area of thrust for the SBI in its bid to expand global operations was to increase its operations in the retail and corporate sector.

Bhatt also said SBI planned more branches in Canada, possibly next year

SBI recovers Rs 2,000-cr bad loan

State Bank of India (SBI) is likely to report an improvement in its asset quality when it presents its first quarter results. According to top SBI sources, the bank has recovered bad loans worth around Rs 2,000 crore during April-June 2008.

Top SBI executives, when contacted, refused to comment. SBI managing director SK Bhattacharyya said: “We can’t divulge details before the first quarter results announcement.”

SBI’s credit quality had deteriorated during 2007-08, as it booked fresh bad loans worth Rs 2,700 crore, mainly on account of retail loans, and to some extent, mid-sized corporate loans. As on March 31, 2008, the bank had gross non-performing assets (NPAs) of Rs 12,837 crore compared with Rs 9,998 crore, a year back.

“On the other hand, the bank is slated to make a provision of around Rs 1,000 crore against mark-to-market (MTM) losses of its investment,” an SBI official said on conditions of anonymity. Out of this sum, around Rs 700 crore is expected to be provided for against depreciation of bonds the bank received from the government on account of its rights issue.

Banks are booking MTM losses against depreciation of bonds and equity investments during April-June 2008 period. Nevertheless, SBI is expected to clock double-digit growth in the first quarter to June 30, 2008 over the corresponding period a year back. This is despite the fact that demand for loans from sectors like commercial real estate and auto has slowed down.

Coming back to SBI’s bad loan management, government’s debt waiver-cum relief scheme would help SBI reduce its bad loans by another Rs 2,000 crore. SBI has waived overdues of around 25 lakh farmers, aggregating about Rs 7,000 crore. “It’s estimated that around 30% of the total waived sum had become NPAs,” another SBI insider indicated. Gross NPA stood at 3.04% as on March 31, 2008 while the net NPA stood at 1.78%.