SBI Current Affairs - 2020

JNPT signs ECB Agreement worth $400 Million with SBI and Development Bank of Singapore

India’s premier container port, Jawaharlal Nehru Port Trust (JNPT) in Navi Mumbai has signed 400 Million US Dollar agreement with State Bank of India (SBI) and Development Bank of Singapore (DBS) for External Commercial Borrowing (ECB).

The agreement was signed by JNPT officials in the presence of the Union Minister for Shipping, Road Transport & Highways Nitin Gadkari in Mumbai, Maharashtra.

Key Facts

  • With this ECB Agreement, JNPT becomes the first major port in the country to take loans in dollars to improve the infrastructure.
  • The ECB of 400 Million dollars will be primarily utilised for expansion of JNPT’s existing road network connecting to its port project. It will help JNPT to double its existing capacity.
  • JNPT was able to take loans in dollars as it has US dollar denominated foreign currency earnings which can be leveraged for a low cost foreign currency borrowing.

Why Ports are opting for low cost foreign currency borrowing?

  • Port projects, including connectivity infrastructure projects are critical to developing cargo handling capacity of the country.
  • With Central Government’s thrust on port led development under the Sagarmala programme, improving viability of port projects is critical.
  • One of the primary factors that impacts viability of port projects is the interest rate on borrowings to fund projects.
  • While Ports have surplus funds, they also need to borrow to achieve a quantum jump in the investment.
  • Thus, ECBs is an innovative means of raising low-cost particularly when the port had revenues in foreign exchange, which provided a natural hedge to the ports.
  • This would substantially help to eliminate the requirement of hedging the forex risk and would reduce the cost of borrowing.
  • The step is also considered as another milestone in infusing dynamism into the functioning of the ports, both in their operations and financing.
For more information: External Commercial Borrowings

SBI board approves merger of 5 associate banks, BMB with itself

The State Bank of India’s (SBI’s) board of directors has approved merger of its five associate banks and Bharatiya Mahila Bank (BMB) with itself.

These five subsidiaries are State Bank of Bikaner & Jaipur, State Bank of HyderabadState Bank of Mysore, State Bank of Travancore and Bharatiya Mahila Bank.

Key Facts

  • The board  has finalised the share swap ratio for three of the listed subsidiaries and BMB.
  • It also approved merger of two unlisted associate banks State Bank of Patiala and State Bank of Hyderabad with it.
  • The merger will create a global-sized bank with assets worth over Rs 37 lakh crore. It will make SBI one of the top 50 global financial powerhouses in the world.
  • The merged entity will have network of 22,500 branches and 58,000 ATMs serving a customer base of over 50 crore.
  • SBI has close to 16,500 branches, including 191 foreign offices across 36 countries while the five subsidiary banks have nearly 6,000 branches.
For more details: Cabinet Approval