SBI chairman Om Prakash Bhatt in Mumbai on Saturday. (PTI)

Mumbai, July 1: State Bank of India (SBI) is exploring opportunities to reach out to foreign countries in a big way. For now, it has set its sights on West Asia and is forecasting a 25 per cent growth in advances for 2006-07.

SBI is also planning to raise close to Rs 2,500 crore to meet the Basel II requirements and feed the strong credit demand. The bank could raise the money from an Upper Tier II issue or a hybrid capital, Om Prakash Bhatt, who assumed charge as chairman of the bank today, said.

Bhatt said SBI had already raised close to Rs 2,300 crore this year through subordinated debt. However, more funds are necessary to meet strong demand for corporate and retail loans.

He hinted that advances during the first quarter of this year may take a hit due to the week-long strike in April. He gave a relatively muted forecast for its loan growth book for the year. He, however, was quick to add that the picture has changed over the past few days.

Against a rise of 30 per cent last year, SBI now expects advances to grow by 25 per cent. Bhatt said a growth of 30 per cent was not sustainable. ?It is not sustainable. This (25 per cent) is a good growth rate,? he said.

Bhatt, who joined SBI as a probationary officer when he was 21, has held a number of important assignments during his stay here.

Admitting he had a gameplan in place to take SBI to greater heights, Bhatt said this vision would be put into action only after he had discussed it with other senior executives of the bank.

The new SBI chairman is following in the footsteps of his predecessor, A.K. Purwar. While the bank had earlier acquired PT Bank IndoMonex of Indonesia and Indian Ocean International Bank (IOIB), a Mauritius-based bank, SBI will now focus on West Asia. ?We want to grow through the organic, inorganic or partnership route,? he added.

On the domestic front, the bank hopes to increase its market share in business terms to 19 per cent from 17 per cent even as the plan is to also grow its rural and SME portfolio.

Replying to a query on the listing of its associate banks, Bhatt said State Bank of Patiala and State Bank of Hyderabad are likely to be the first two banks to hit the markets after the SBI Act is amended.