India's SBI considering Malaysian ringgit bonds

By V. Ramakrishnan

PUDUVAYAL, India (Reuters) - State Bank of India, India's largest bank, is considering raising $200 million to $500 million in bonds denominated in Malaysian ringgits to broaden its resources for international operations, its chairman said on Sunday.

SBI chairman O.P. Bhatt told Reuters in an interview the state-run bank had no direct U.S. subprime exposure and the plan to raise money in Malaysia was in part due to tough conditions in regular debt markets.

"We are looking at it actively," Bhatt said of the bond plan, speaking in Tamil Nadu after the opening of the bank's 10,000th branch.

Bhatt said SBI was growing its international business aggressively and needed more resources.

"This is required partly because of the growth we have in international business and partly because of the difficulties which are there currently in international markets to raise hard currency resources," he said.

The tenure and interest rate of the bond would be determined by the market, he said, adding that borrowing a smaller amount would not be cost effective, while raising more may not be feasible as the Indian bank was entering that market for the first time.

SBI would also consider raising resources in other countries.

"So as a prudent bank we are looking at other avenues which are available and acceptable to us," he said.