State Bank of India would soon approach Reserve Bank for granting permission to a management contract deal with Commercial Bank of Ethiopia. SBI had participated in a global bid floated by Commercial Bank of Ethiopia (CBE) for management contract. SBI's bid was accepted. SBI will seek approval of the RBI after negotiations of various terms of contract are concluded, official sources said in New Delhi on Friday. The two banks signed a draft agreement on June 29 and planned to implement the three-year contract by September. Sources said the contract envisaged that CBE would pay SBI an annual fee of about three million dollar a year for the management contract. Sources said that SBI is still negotiating certain terms of contract and the arrangements have not yet been finalised. A detailed due diligence exercise has been carried out and all the pros and cons of the arrangement have been duly considered, the sources said, adding that since negotiations are still on, the time frame can not be indicated at this stage. The Indian embassy at Addis Ababa provided the lead to the country's leading bank for bidding for CBE following a report by Ernst Young submitted a blue-print for the Ethiopian Bank.
If the deal receives regulatory NoD, sources said, SBI would deploy six staff members in the Ethiopian Bank and assist the bank in its restructuring drive. SBI's main mission will be to make CBE internationally competitive, train the local work-force, introduce radical changes in it, HRD, credit and NPA management. Bureau Report