SBI to create fund for investing in equity of infra projects
State Bank of India today signed an MoU with the Gujarat Govt to create a fund of Rs 5,000 crore for investing in equity of infrastructure projects.business Updated: Jan 13, 2009 15:18 IST
Country's largest public sector lender State Bank of India (SBI) on Tuesday signed an MoU with the Gujarat government to create a fund of Rs 5,000 crore for investing in equity of infrastructure projects.
"We have signed a MoU with Gujarat government to create a fund of Rs 5,000 crore to invest in equity of infrastructure project," Chairman SBI OP Bhatt said.
This will be over and above the deployment Rs 30,000 crore in SMEs, he said.
The investment comes close on the heels of an announcement made by Bhatt, yesterday at the Vibrant Gujarat Global Investors' Summit (VGGIS), to facilitate fund deployment of Rs 30,000 crore in small, medium enterprise (SMEs) over the next three years, in the state.
Expressing concern over the impact of slowdown in Gujarat, Bhatt said, "Interest coverage ratio has gone down from 5.4 per cent to 3.5 per cent mainly due to decline in textile sector, which has large presence in Gujarat."
Speaking about SME's landscape in India, Bhatt highlighted the tremendous potential for fund mobilisation in the sector, in country as well as in Gujarat.
According to Bhatt, contribution of SMEs is nearly 40-50 per cent to GDP growth of the nation, and this sector accounts for 50 per cent of the industrial output.
"Banks could accrue a revenue of over Rs 28,000 crore by encouraging the SMEs," Bhatt said adding, "SME's sector is to grow fastest in next five years, with 14 per cent growth in terms of revenue and 13 per cent in terms of profits."