Industrial Development Bank of India chairman and managing director M Damodaran has said he will give the State Bank of India, India's largest commercial bank, "a run for its money".
The statement, at a dinner hosted by him on June 28, has created a stir in the banking industry, which is interpreting it in various ways. Those invited for the dinner included bankers, industrialists, top public sector executives and government officials.
Sources said Damodaran's statement clearly meant that IDBI, which is to be converted into a bank from July 1, would make an aggressive entry into retail banking.
Accordingly, it was likely to consider merging a large public sector bank to give it reach as well as increase its balance sheet size beyond ICICI Bank, which is at present India's
Earlier at the board meeting on June 28, IDBI had sanctioned loans amounting to Rs 1,400 crore (Rs 14 billion) and Damodaran said IDBI would sanction loans to the tune of Rs 15,000 crore (Rs 150 billion) during the current financial year as against around Rs 4,000 crore (Rs 40 billion) in 2003-04.
Bankers said Damodaran was inching close to SBI given the aggressive target he set for the year. Last year, SBI had increased its loan portfolio by 14.6 per cent, or Rs 20,000 crore (Rs 200 billion), to Rs 1,57,934 crore (Rs 1,579.34 billion).
When contacted, Damoda ran said, "My statement is open to interpretation. I meant every word of what I said."
In response to a query on merger with a public sector bank, he said, "You are open to speculate."
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