SBI To Unlock Value Through NBFC

State Bank of India (SBI) is desperate to hold on its top spot in the Indian banking sector but to do that the country''s largest public sector bank will need huge sums of capital to fight off growing competition from aggressive private sector rivals like ICICI Bank.

In FY08 alone, SBI estimates that it will need Rs 15,000 crore for growth and regulatory requirements. Next three capital requirements will jump to Rs 50,000 crore and capital needed over the next 5 years is estimated at Rs 80,000 crore.

SBI will finalize the exact manner in which this money will be raised only after the SBI Act is amended during the monsoon session of parliaments. But sources indicate that the money will be raised through the combination of a preferential issue and a Follow on Public Issue which will hit the markets towards the end of the calendar year. SBI is in the process of setting up an NBFC which will hold its insurance and asset management businesses.