SBI Mutual Fund IPO to come before SBI general insurance: SBI chief

SBI Chairman Rajnish Kumar said his bank is confident of absorbing any shock, thanks to its resilient balance sheet. He reiterated that he has no intention of helping out private lender YES Bank.

Kumar said SBI Mutual Fund IPO will come before SBI General Insurance’s issue. He further said that banks are in the business of taking risks, but such risks should be priced correctly. The difference between private sector banks and public sector banks lies in pricing this risk, he said. Kumar said his bank has also lost money in the telecom sector, but insisted that the banks has diversified its risk well.

“What is not very large for SBI, could be large for others. Telecom sector was one of the stories, which was most sought out sector when we lent to the sector. But people burnt their fingers or even body with it,” he said.
“We are a large bank. We have a certain responsibility. A private bank has a choice in selecting their business, but State Bank does not have a choice,” he said. SBI is capable of change and managing change well, Kumar. It’s a leader in digital transformation, he said.

SBI chairman said that it is the responsibility of a bank’s management to deliver value to the shareholders. Globally, he said, the process is shifting to the value of stakeholders and not shareholders. While SBI is seeing some requests for project funding, it still does not have large projects, he added.

“Our working capital funds are lying idle. Demand is yet to pick up,” Kumar said. According to him, availability of debt is not a problem. “Problem is availability of equity and confidence” Kumar insisted that one must not be pessimistic about the future even in a slowdown. “We need to improve productivity to achieve $5 trillion economy goal.”