SBI chairman O.P Bhatt in Mumbai on Thursday. (Fotocorp)

Mumbai, June 28: The State Bank of India is planning a holding company for its insurance and asset management businesses.

It is looking at several new ventures and is also not ruling out a merger of its seven associate banks with itself. ICICI Bank, too, had recently set up a holding outfit to manage its insurance businesses. State Bank chairman O. P. Bhatt said a follow-on public offer would be made by December.

The bank is looking forward to the amendment of the SBI act that will give it the power to raise resources through new instruments such as preference shares.

Bhatt said the bank was planning to list the holding company next fiscal. It was also open to the idea of inducting strategic investors in the holding company. The extent of selloff would not be more than 10 per cent because the purpose of the exercise was to determine the market value of the company.

According to Bhatt, a holding company will enable the bank to unlock the value in its life insurance and asset management businesses. Preference shares are another option before the bank. This will be considered after the amendment of the act.

The bank has identified at least eight new areas, including financial planning, custodial services and general insurance. A focus area is the rural sector, for which it has set up a business group. Bhatt said a decision on the merger of seven subsidiaries would be taken only after considering the views of stakeholders.

Home loans

Borrowers of housing loans from the bank can expect some changes in their equated monthly instalments (EMIs).

A senior SBI official said the bank would tweak EMIs because interest rates have gone up by two percentage points in the last one year.