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| The South Indian Bank Limited |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 26384 |
| Company name | The South Indian Bank Limited |
| Country | India |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | August 9, 2007 |
| Projected board date | September 10, 2007 |
| Date revised SPI disclosed | October 17, 2007 |
| Previous Events | Invested: September 19, 2007
Signed: September 14, 2007
Approved: September 13, 2007 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The project involves an investment in The South Indian Bank Limited (SIB or the Bank), a medium-sized private sector bank based in Kerala. As of March 31, 2007, the Bank had Total Assets of approximately $3.2 billion and net worth of $168 million. The project will help augment SIB’s capital base to meet its growth plans. This project is part of IFC’s strategy of supporting professionally run, mid-sized private sector banks to emerge as strong players in the Indian financial sector. |
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| Project sponsor and major shareholders of project company |
| The Bank’s shareholding is well-diversified with a large proportion of individual investor holding and Foreign Institutional Investors (FII) holding. There is no single identifiable Sponsor/Promoter. As of June 30, 2007, public shareholding in SIB was 44.2%, FII holding 43.2%, domestic financial institutions holding 7.8% and corporate bodies holding 4.8%. |
| Total project cost and amount and nature of IFC's investment |
| IFC’s investment in the project is an equity investment of about $ 17.5 million for 4.8% equity stake in SIB. |
| Location of project and description of site |
| SIB is headquartered in Thrissur in the state of Kerala in India and has a large network of 475 branches across 23 states across India as of March 31, 2007. |
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| Anticipated development impact of the project |
| The project will support the growth of the private sector in the banking sector and improve the quality of banking services through increased competition and introduction of best banking practices. This project will also help in expanding the reach of banking services to the underserved segments such as Small and Medium Enterprises, retail and agriculture, which are key to SIB’s growth strategy. SIB has a large proportion of its branches located in rural and semi-urban areas which will help stimulate rural development. |
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| IFC's expected development contribution |
IFC’s expected development contribution is to:
- provide funding support to help the Bank meet its expansion plans; and
- to assist the Bank with appropriate advisory services in areas like risk management and business strategy to help it transform to a national player from being a regional player. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.
IFC analyzed the Bank’s portfolio for types of transactions, size, tenor and industry sectors, and determined the Applicable Performance Requirements based on an analysis of the potential social and environmental risks associated with the FI portfolio and considering IFC’s investment. The Applicable Performance Requirements are:
- The IFC FI Exclusion List; and
- The applicable Indian social and environmental Laws and regulations.
IFC also reviewed the Bank’s existing Social & Environmental Management System (SEMS), and capacity to implement the same. Based on the Applicable Performance Requirements and FI SEMS and capacity review, the project will be required to:
- Develop an SEMS according to a timebound action plan;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS, to ensure that its investments/activities are in compliance with the Applicable Performance Requirements; and
- Submit a periodic report to IFC as per a format to be provided by IFC. |
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| For inquiries about the project, contact: |
Dr. V. A. Joseph, Chairman & CEO
The South Indian Bank Limited
SIB House, Mission Quarters
Thrissur-680 001
Kerala, India
Telephone: 91-487-2420020
Fax: 91-0487-2442021
Website: www.southindianbank.com |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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