The proposal is subject to necessary approval from the Reserve Bank of India and some other regulators and, so, would take a couple of months to be given final shape. However, the Bank is planning to launch the service by the end of September, SBI Deputy General Manager (Corporate Strategy &New Business) Deepak Chawla told the sources.
SBI and Societe Generale Securities Services, part of Societe Generale Group, have entered into a joint venture for custody services, in which SBI and SG will hold 65 per cent and 35 per cent stake respectively.
The new JV company will be based in Mumbai and offer a range of services to both foreign and domestic investors including custody, depository, fund administration, registration and transfer agent services.
SBI would be the first public sector bank in India to enter the custody services sector. The joint venture will leverage SBI's strength in the Indian financial sector. SGSS will contribute its recognised experience and best practices as a leading global custodian providing securities services worldwide.
Societe Generale will also help channel foreign institutional investor business to the JV and offer global custody facilities to eligible Indian clients of the JV.
''The JV's unique selling point will be state-of-the-art service delivery, with total focus on rendering world class service to all major players -- be they FIIs, FIs or Asset Management Companies,'' Mr Chawla said.
For the proposed business, the Bank would have to appoint a separate work-force which will be trained for the customer services, Mr Chawla said adding that the JV company is not a part of the Bank, but will enable it to concentrate on service delivery in the area of custody, fund administration and various securities services in order to ensure that the best of practices are followed and customer satisfaction ensured.
Apart from the growing interest in India among foreign institutional investors, the recent regulations permitting Indian mutual funds to invest abroad is likely to open an annual opportunity aggregating USD 7 billion of Indian investments abroad. The JV would be well poised to tap this opportunity, Mr Chawla added.