SBI merges advisory biz into bank over conflict of interest

Mumbai: SBI has said that its investment banking arm

SBI Caps

will cease to offer debt resolution and other advisory services, and these will henceforth be done within the bank. The move is aimed at avoiding a conflict of interest situation where SBI Caps pitches for advisory business where the parent is the lender.

The carving out of the advisory services is also part of the restructuring being undertaken ahead of a stake sale by SBI in SBI Caps. Chairman Rajnish Kumar had earlier indicated that the bank would bring in a strategic investor into SBI Caps. In a statement issued to the stock exchange, SBI said the Project Advisory and Structured Finance (

PASF

) group of SBI Caps is involved in project advisory and loan syndication, refinancing, debt resolution, M&A and government advisory services.

“ln view of duplication of processes resulting in delays, as also certain regulatory concerns, it is decided that the activities like debt syndication and debt resolution mandates taken from private sector companies offered by PASF, SBICAPS, are discontinued,” the bank said . SBI will continue to provide support and assistance to all its customers on an ongoing basis.

The announcement also comes at a time when SBI has been tasked with taking the lead in resolving most of the stressed loans with multiple lenders.