State Bank of India enters the custody services sector
SBI & Societe Generale Securities Services form JV
State Bank of India (SBI) and Societe Generale Securities Services (SGSS), part of Societe Generale Group, have announced a joint venture which will offer custody and related services in India. SBI and SG will hold 65% and 35% respectively of the equity in the new company.
The new company, SBI SG Custodial Services, will be based in Mumbai and offer a range of services to both foreign and domestic investors and clients, covering custody, depository, fund administration, registration and transfer agent services.
SBI will become the first public sector bank in India to enter the custody services sector. The joint venture will leverage SBIís strength in the Indian financial sector. SGSS will contribute its recognised experience and best practices as a leading global custodian providing securities services worldwide. Societe Generale will also help channel foreign institutional investor business to the JV and offer global custody facilities to eligible Indian clients of the JV.
Apart from the growing interest in India among foreign institutional investors, the recent regulations permitting Indian mutual funds to invest abroad is likely to open an annual opportunity aggregating USD 7 billion of Indian investments abroad. The JV will be well poised to tap this opportunity.
SBI already had a asset management Joint Venture, SBI Fund Management, with Societe Generale Asset Management since 2004. This deal further strengthens the partnership between the two banking groups.
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