The country’s biggest lender, State Bank of India has been thinking about purchasing a major stake in Tata Motors Finance. The bank is now waiting for clearance from RBI for the deal. SBI Chairman O P Bhatt said, “We have written to the RBI. We are awaiting a response”.
The bank is looking at a 30% stake with Tata Motors Finance, the car financing division of Tata Motors. The bank cannot opt in for a bigger stake since that would be need extra approval from the Government.
Bhatt said, “(To acquire) beyond 30 per cent we have to go the government for clearance. So we will take somewhere between 20 and 30 per cent. That means we need the approval only from the Reserve Bank of India”.
The bank has been thinking about plans of this stake for quite some time. Then OP Bhatt had said, “Our investment committee would like the bank to take part in the deal and invest some amount (in Tata Motors Finance)”.
SBI had bought a 91% stake in Global Trade Finance (GTFL), a factoring services company in 2008. With a stake in Tata Motors Finance, the bank makes its entry in the commercial vehicle division.
SBI dominates 15% of the car loan market. The bank has become assertive in this sector over the past few years.