SBI has Rs:500 Crs exposure to Maytas Infra

State Bank of India fell 4.86% to Rs 1,156.85 on BSE, on 12th Jan'09, after reports that the bank had about Rs 500 crore in exposure to Maytas Infra.

State Bank of India (SBI) has no exposure to outsourcer Satyam Computer Services but has an exposure of about Rs 500 crore to Maytas firms, the banks' chairman said today, 12 January 2009. SBI's exposure to companies with the Maytas tag is both fund and non-fund based, O.P. Bhatt told television news channel.

Bhatt said that the exposure was fully collateralised with no problem as of now. He said the bank was reviewing the exposure.

Maytas Infra and Maytas Properties are owned by the family of the founder chairman of Satyam Computer Services. Satyam's founder and former chairman Ramalinga Raju revealed an accounting fraud last week followed by a stunning resignation letter on 7 January 2009. Reports added that Satyam provides services to State Bank of India (SBI)'s IT department though the bank has no exposure to Satyam.

The Raju family had reportedly borrowed money from a large number of organisations to tide over the financial crunch that was affecting the group's infrastructure-related projects.

Andhra Pradesh Chief Minister Rajasekhara Reddy has said that the state government is reviewing the ability of B Ramalinga Raju family-promoted Maytas group firms to carry out the works awarded to the group by the state government. A consortium of Maytas Infra was awarded a Rs 12,000-crore Hyderabad metro rail project and a Rs 1,200-crore Machilipatnam Sea Port project by the state government. The metro rail project is expected to announce its financial closure by March 2009, while sea port project will take about six months for the same.

Note: AP Govt Should have reviewed Matas before Work Allotment insted of Reviewing Aftermath.