MBSL ties up with India's SBI Caps

The Sri Lankan Government is positive about restructuring public/private institutions. "Some of the privatisation at large may occur according to models that will be beneficial to Sri Lanka.

In this context, it is noteworthy to mention that India being the largest economy in South East Asia has had far-reaching experiences in handling complex privatization, and government to government transactions with great success." Managing Director Sunil Wijesinha said.

The Merchant Bank of Sri Lanka Limited (MBSL) signed a MOU with SBI Capital Markets Ltd, for an alliance in fee based capital market activities. Under this MOU, SBI Caps, with its technical and financial know-how, will work closely with the MBSL to develop and design new capital market products already tested and proven in the region. SBI Caps will also train MBSL staff in relevant areas and jointly handle assignments on a fee sharing basis.

Wijesinha said there is an enormous potential for the untapped capital market products in Sri Lanka. "With SBI Caps' extensive experience in handling both private and public sector capital market related assignments in the region, we are confident of bringing in much needed financial modelling techniques and products to the local market", he added.

SBI Caps was founded in 1986 as a 100% subsidiary of the State Bank of India (SBI), India's largest commercial bank, with assets over US$ 110 bn. SBI Group accounts for approximately 30% market share in banking assets in India. SBI Caps is ranked 38th in the world and 11th in Asia among project finance arrangers by Project Finance International, Thompson Financial.

The Asian Development Bank took a 13.84% stake of SBI CAPS in 1997. With well over 110 million customers. The SBI Group reported a profit of US$ 1.26 bn in the last Financial year.

Wijesinha said that there is a vast potential for business tie-ups between India and Sri Lanka. "There are many companies of Indian origin which have already set up business operations in Sri Lanka. There are many reasons as to why these companies decided to venture out of the borders of India and house their industries in and around Colombo.

There are more Indian companies vying for investment opportunities offered by Sri Lanka. Similarly Sri Lankan businesses have also leaped forward where they have tied up and are looking for regional expansion. This opens a window of opportunity for the joint operations" he added.

The agreement was signed by Chairman of MBSL S.N.P. Palihena and Managing Director CEO SBI Caps Indrajit Gupta. (AGP)