The country's largest lender, State Bank of India has been eyeing a big stake in Tata Motors Finance. The bank now awaits clearance from the apex banking regulator, RBI for the deal.
"We have written to the RBI. We are awaiting a response," SBI Chairman O P Bhatt said.
The bank is contemplating a 30 per cent stake with Tata Motors Finance, the vehicle financing arm of Tata Motors. The bank cannot go in for a higher stake as that would be requiring additional approval from the Government.
"(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," Bhatt said.
The bank has been harboring plans of this stake since quite some time. "Our investment committee would like the bank to take part in the deal and invest some amount (in Tata Motors Finance)," SBI Chairman OP Bhatt had said.
SBI had acquired a 91 per cent stake in Global Trade Finance (GTFL), a factoring services company in the year 2008. The promoters of GTFL were Export-Import Bank of India, International Finance Corporation, Washington, and Malta-based FIM Bank.
A stake in Tata Motors Finance will give the bank an entry to the commercial vehicle segment.
As part of financing the Bharti- Zain deal, Mr. Bhatt has said that the bank has not yet made any commitment of loan financing to Bharti. The issue is still on discussion stage.
SBI controls 15 percent of the auto loan market. The bank has become aggressive in this segment in the last few years.