"We are thinking in terms of a public issue", Iyer said. Qualifying this, he said the timing of the issue would depend on the conditions in the stock markets and the pricing.

"We will like to be able to fix a premium of Rs 90 per share", he said.Reducing its stake in SBI caps would be the commencement of the bank's process of reducing its stake in its subsidiaries. The bank intends to bring down its holding in its subsidiary companies below 51 per cent.

Iyer, however, made it clear that the decision to reduce its stake was still on the drawing boards and a concrete plan of action would be implemented at an opportune time.

In fact, the bank is anxious to get the contentious issue of its associate banks settled as well. Iyer said all the associate banks should also go public and raise funds on their own merit in order toshore up their capital."How long can we go on pumping funds into them", he asked.

Incidentally SBI Caps, which is the merchant banking outfit of the bank, is to be merged with SBI securities, its broking arm. The Asian Development Bank also holds a stake in SBI Caps.

The other subsidiaries of SBI are SBI Factors, SBI Funds Management and SBI Gilts. All these subsidiaries were floated by the bank in the last three or four years.

Cutting down its stakeholding in its subsidiaries is expected to help the bank focus on its core business of lending and enhancing shareholder value."We will have a participation from the public and there will be more accountability", Iyer said. It also gives SBI Caps, one of the premier merchant bankers in the country, the freedom to access funds from the public, he added.

The move will also reduce SBI's responsibility towards its subsidiaries both administratively and financially.

Iyer said the subsidiaries in their turn, with elected members on their boards, would takeadvantage of the autonomy they would get out of the strategy of disinvestment.

Any final decision on the fate of the seven associate banks would await clearance from the Union Finance Ministry for amendment of state bank of India Associate Bank Act.

Meanwhile during the next two years the bank is targeting a 21 per cent growth in its deposits while advances are expected to increase by 16 per cent, Iyer said.