The country’s largest lender State Bank of India (SBI) on Tuesday said it will increase its stake in SBI Card to 74% by June end.
“Stake will be increased by first quarter of next financial year...there are few regulatory issue that is being sorted out,” SBI chairperson Arundhati Bhattacharya said at the launch of SBI Card Unnati.
The board of SBI has already given approval for hike of the bank’s stake in its two credit card joint ventures with General Electric Company to 74%.
The bank has approval to infuse Rs 1,160 crore in the two JVs — SBI Cards and Payment Services (SBICPSL) and GE Capital Business Processes Management Services (GECBPMSL)— through purchase of equity shares from GE Capital so as to increase the bank’s stake in both the companies to 74%.
Asked about remaining 26% stake, she said, the decision has to be taken by GE. “Within next one month there should be finality on the remaining stake sale,” she said.
The American company seeks to exit SBI Cards. SBI currently holds 60% stake in SBICPSL and 40% in GECBPMSL. The balance being held by GE Capital in both the ventures.
As per an agreement between SBI and GE Capital at the time of formation of SBI Cards, it was decided that whenever any party decides to exit the JV, the decision has to be on the basis of mutual understanding.