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June 14, 2001
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Money > Business Headlines > Report June 14, 2001 |
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SBI's overseas operations under a cloudBS Banking Bureau The Reserve Bank of India has put State Bank of India's foreign operations under the microscope. SBI's New York branch, the backbone of its overseas operations, is in trouble. Its Singapore branch recently booked a loss of $10 million, with the exposure to the Ahmedabad-based Arvind Mills turning bad. The US department of commerce recently raided SBI's New York branch for alleged violations of rules. Even though senior SBI executives brush aside the incident saying, "it was a routine examination," sources say things are not smooth in New York. A number of senior officials have made trips to New York in the last fortnight to take stock of the situation. Sources also allege that the bank has transferred the $10-million sticky account from its Singapore branch to one of its offshore units. Had the account been kept in Singapore, the bank might have been forced to send in fresh capital to maintain the capital adequacy ratio. Despite the problems, SBI's overseas operations closed fiscal 2000-01 with substantial contribution to the bank's bottomline, thanks to the recovery of an old bad debt. The bank recovered $15 million from an old 1987 bad loan, which was transferred to SBI's books when it took over Punjab National Bank's London office. SBI recently recalled its president and chief executive officer of US operations, S Sundar, and appointed a new functional head in his place in New York. It has also appointed new chiefs at its downtown services branch in New York and the Nassau Overseas Banking Centre, which accounts for high value assets. The recast has come after the winding up of its European operations, Sebal, which was headquartered in London. SBI closed down its representative offices in Tashkent and Harare in 1999. SBI has 52 overseas offices spread across 31 countries. Powered by YOU MAY ALSO WANT TO READ:
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