Amidst global financial distress, State Bank of India [Get Quote] has hinted that it is mulling overseas bank acquisition. SBI Chairman O P Bhatt on Friday indicated that though there were no immediate plans, the bank was definitely having a look at it.

"It (overseas acquisition) will be. There is no immediate target, there is no immediate plan, but we are thinking about it. We are looking more in terms of consolidation (overseas) where we have business. Increasingly, we are aligning our overseas operation with the Indian diaspora," Bhatt said.

However, Bhatt also stressed that the bank would continue to focus on expansion in the domestic market. "With the way India is growing, there are huge pockets of profitability across the country. There is a need to expand in the domestic market vigorously," he said, while addressing the first press meet after the merger of State Bank of [Get Quote] Saurashtra with SBI. Commenting on the bank's exposure to Lehman Brothers, he said that it has fully provided for its $5 million exposure."We expect to recover 60-70 per cent of it (Lehman Brothers' exposure)," Bhatt said.

SBI, the largest lender in the country, has raised concerns about rising interest rates as it may lead to an increase in the non-performing assets of the banking sector.

"At the moment, we are not seeing large increases in NPAs, but we should be watchful of them," Bhatt added.

The bank is eying a credit growth of 24-25 per cent during 2008-09. "Credit growth continues to be relatively high compared with deposit growth in absolute terms," he said, pointing to tight liquidity conditions in the banking system.

Bhatt also said that he did not expect interest rates to fall in the immediate future.