In a change of strategy, the State Bank of India (SBI) is planning to acquire small stakes in Asian and African banks, investing around $10 to $15 million in each case, instead of buying out banks.

This is being planned to strengthen SBI's overseas operations. SBI is the country's largest commercial bank with an asset base of close to $90 billion (Rs 4,80,000 crore -- Rs 4,800 billion).

The bank is expected to shortlist likely targets for acquistion of stakes in the next two months, SBI Deputy Managing Director and Group Executive, international banking, BD Sumitra, said on the sidelines of the Indo-US Summit held in Mumbai last week.

"We are on the lookout for small banking entities in Asia and Africa," Sumitra said. The due diligence will start once the shortlisting is complete.

The proposed plans for acquisition are in line with the current thinking in the government and banking circles to attain scale to meet global competition.

The bank expects overseas operations to contribute 15-20 per cent of its profits in the next two to three years. It has  subsidiaries in Canada, Nepal, Bhutan and Nigeria and has applied to the Reserve Bank of India for opening new branches in Asia, Africa and Canada.

In the recent past, SBI had spoken about its plans to expand its international operations by opening 16 new overseas offices in the current financial year. SBI Chairman AK Purwar had indicated the bank's plan to raise up to $750 million from the global market in 2004-05.

Overseas operations, which contribute around 5-6 per cent of the bank's bottom line, were expected to rise to around 10-15 per cent in two to three years, said a bank official.

Speaking on SBI's technology initiatives overseas, Sumitra said the bank would deploy Finacle core banking, e-banking and treasury solutions across the operations in 20 countries and eventually in 70 branches across 36 countries.