SBI creates wholly-owned subsidiary to manage real estate

The country's largest lender State Bank of India has incorporated a specialised firm -- SBI Infra Management Solutions Pvt Ltd (SBIIMS) -- that will manage its premises and real estate property across the country.

The move is seen as public sector banks' efforts to exit non-core activities to improve balance sheet as they have piled up huge bad assets over the past few years.

With strict guidelines from government, many state-owned banks are exiting their non-core activities as well as selling their bad loans to asset reconstruction companies and other financial entities.

SBI said that the new entity has been established to save time of banks' executives who are involved in managing these non-core businesses.

"The primary role of the new entity will be to handle transaction management/ advisory services, project management, facility management and implementation of policies and initiatives," SBI said in a statement today.

With this, the officers who were involved in non-core activities would be better utilised for core banking services, it said.

"We realised that the job of acquisition, construction and maintenance of owned and leased premises, which is a non-core activity, were being looked after by 1,100 officials of the bank including 200 technical officials. Hence, it made sense to create separate entity employing much lesser number of employees," Arundhati Bhattacharya, Chairman of SBI said.

She said the new subsidiary will have 400 dedicated officials to handle premises and real estate related jobs.

SBIIMS will have its circle office in each local head office centre of SBI and about 100 zonal offices at administrative office centres of SBI on pan India basis. Initially, this subsidiary will look after work related to premises and estate of SBI group only.