SBI to Divest up to 10% in Life Insurance Arm

Weeks after the passage of insurance legislation, State Bank of India on Tuesday decided to divest up to 10% stake in its life insurance arm SBI Life, giving the first right of refusal to foreign partner BNP Paribas Cardif of France. 

"The stake dilution process would progress only after getting a clear signal from the foreign partner," SBI Life Insurance MD and CEO Arijit Basu said. SBI Life Insurance is a 74:26 % joint venture between SBI and BNP Paribas Cardif of France. At present, SBI owns 74% of the total capital and BNP Paribas Cardif has the remaining 26% in the joint venture. 

"Stake dilution may not take place this year. It is an enabling provision," he said, adding that it may take place in the January-March quarter of next year subject to conditions. Board is competent enough to enhance the stake dilution portion if it thinks so in consultation with the foreign partner, he added. Asked if SBI Life is planning public offer, Basu said: "Not this year. IPO would be a process in the long run." Stake dilution by SBI will help the country's largest bank in monetizing its investment and provide growth capital for banking business.