SBI cancels proposed JV with VISA, Elavon
03 Jan 2012
State Bank of India has cancelled negotiations for establishing a joint venture with Visa Inc and Elavon Inc for conducting merchant acquiring business.
SBI had, in a letter dated 4 May 2010, proposed the setting up of a joint venture between its wholly owned subsidiary SBI Payment Services Pvt Ltd and Visa Inc and Elavon Inc.
SBI, India's largest lender, meanwhile said it expects fund infusion from the government current fiscal itself.
SBI had sought fresh infusion of capital to the tune of Rs20,000 crore. While the government is yet to officially make a statement on fresh capital infusion in SBI, the bank said the government has already committed to providing enough funds to keep SBI well capitalised (Banks have to maintain a minimum Tier-1 capital of 8 per cent under Basel III norms)
The government has already announced that it is committed to providing adequate capital to public sector banks so as to maintain their Tier-I capital at 8 per cent.
As of September 2011, SBI had a capital adequacy ratio (CAR) of 11.4 per cent. Of this, Tier-I capital stood at 7.7 per cent at the end of the first quarter against minimum 8 per cent level desired by the government.