The public sector banking major State Bank of India (SBI) is now planning to cater to the fund requirements of the small and medium enterprises (SME) sector, which often faces unfair treatment from the banking sector when it comes to lending, by setting up an exclusive fund. The biggest bank in the country has decided to set up a private equity fund to cater to the capital requirements of the SME sector. “We will not only lend, but participate in the equity of SMEs. We will even hand-hold them initially and help with various issues including tapping the capital markets,” said the SBI chairman O P Bhatt. He said the fund would be set up during the current calendar year with a first tranche of about Rs 500 crore. Fund size would be increased as per need. The bank would hold 20% equity in the fund and is talks with potential partners. In order to perform professionally and independently, the fund would not be managed by the external partners.   more »