SBI faces $85 mn Nigerian rider

The State Bank of India will have to pump in over $85 million if it wants to maintain majority stake in its subsidiary in Nigeria, Indo-Nigerian Bank Ltd in order to comply with the new diktats announced by the Central Bank of Nigeria.

The central bank has announced that all banks in the country must have an equity capital of $180 million by December 2005. As of now SBI's subsidiary, Indo-Nigerian Bank Ltd has an equity capital of only $10 million.

SBI currently is majority stakeholder in the bank with 52 per cent stake while local banks hold the remaining 48 per cent. If SBI wants to maintain over 50 per cent in the bank it will have to pump in $85 million.

"We might even negotiate with the central bank for relaxing the new norms. We have no intention of exiting the country. We want to pacify all the concerns in the Nigerian market," said SBI officials.

Indo-Nigerian Bank Ltd, which is a subsidiary of SBI has been in Nigeria for the last 22 years. The management of the bank is overseen by SBI.

"SBI on account of its long association with Nigeria considers the emerging opportunities in West Africa and Nigeria in particular as encouraging," said SBI in a press release.

Further added the release, "SBI shall put in its best endeavor to keep the subsidiary in good standing so that the subsidiary is able to cope with the emerging changes."