Renew RIB money, SBI prods banks

MUMBAI: SBI is nudging all banks to renew the money, while the borrowing banks with which it was placed are dying to get out of such high-cost funds.
The money, raised by SBI in 1998, was on lent to a large number of foreign banks who are now finding it difficult to deploy, with interest rates plummeting to levels that were never foreseen.
Many of these banks, particularly those which have locked the funds in assets of shorter maturity — shorter than the five-year RIB term — recently told SBI that they are not interested in renewing it. Even though RIBs had a five-year tenure, the money that was on lent by SBI was renewed every year under the scheme of placement with the arrangers. It will be due for roll over on September 14.
SBI, in a letter dated Aug 28, has asked banks to renew the contract, pay the interest and service the principal amount that was on lent for the last year, sources told ET. The RIBs will mature on September 14, 2003.