State Bank of India is planning to set up an information technology company for which it is scouting for a joint venture partner, Arun Kumar Purwar, chairman, SBI, has said.

"The joint venture is under discussion," Purwar told PTI, but declined to give names of the joint venture partner shortlisted.

SBI had started a technology upgradation drive from 2001 and earmarked Rs 500 crore (Rs 5 billion) investment in this area.

In view of its nationwide operations, the bank decided to have a dedicated IT company, which would develop cutting edge technology for it and its seven associates.

SBI sources said the bank is integrating treasury operations and technology platform for its ATM and branch inter-connectivity of the parent bank with its associates.

Although merger of SBI and the associates is ruled out in the near future, the SBI group intends to synergise its operations and swap branches to reduce costs and be competitive.

The thrust on technology also comes in the light of introduction of real time gross settlement system in January 2004.

When the IT company comes up, it would handle all the software requirements of the SBI group.

SBI is also on the look out for strategic partners for SBI AMC, its mutual fund arm, and SBI Factors, while winding up SBI Home, its housing finance arm.

It is in the process of appointing a consultant for finding the joint venture partner for the mutual fund arm.

SBI has plans to induct a strategic partner for its merchant banking arm SBI Caps.

The bank has assets worth over Rs 3,76,000 crore (Rs 3,760 billion) with a loan portfolio of over Rs 1,38,000 crore (Rs 1,380 billion) last fiscal and investments of over Rs 1,73,000 crore (Rs 1,730 billion).

SBI's deposits were at Rs 2,96,123 crore (Rs 2,961.23 billion) till the end of last fiscal.