"We will not tinker with the market. Whenever we decide to enter the market, we will do it in a very big way. We have already made a few purchases over the last few days," Verma told reporters after announcing the bank's results. The SBI chief, however, clarified that the bank will not do any rescue acts, or prop the market. "I do not consider it my duty to save the market. My job is to add to shareholder value."

He said equity market operations will be yet another income stream for the bank. "In fact, this is a new focus area to augment the bank's income in the context of shrinking interest spreads," Verma said. "Right now we are in the market since the Sensex is down. We will continue to make purchases whenever the Sensex is down."

Under Reserve Bank of India rules, banks can invest up to five per cent of their incremental deposits in thestockmarket. Since the aggregate deposit growth of the SBI was pegged at Rs 22,000 crore in 1997-98, it can invest up to Rs 1,100 crore in the equity market. He, however, refused to divulge the bank's exact commitments in the secondary market. "We are allowed to take positions both in the primary as well as the secondary markets within the five per cent limit. I cannot tell you the exact quantum of exposure in each segment. All I can say is that so far our equity market operations were less than Rs 100 crore. It will go up in a very big way," Verma said.

"You need to consider the turnover more than the exact quantum of investments. We will continuously churn the portfolio. Even if we sell the stocks and make fresh purchases two-three times, the turnover will be over Rs 3,000 crore in the current fiscal," the SBI chief added. The bank is aiming for a profit of around Rs 100 to 150 crore from its planned equity market operations. "This is possible if we make the purchases at the right time. Now the Sensex isdown and we are in the market. The index can only go up. Naturally we will make money," Verma said. Earlier, in an exclusive interview to The Financial Express, Verma said the bank will not make secondary market purchases through the Unit Trust of India.

"We have the expertise. Besides, SBI Caps and SBI Mutual Fund can help us in this regard," Verma said. The bank is also ready to launch its stockbroking subsidiary, SBI Securities Ltd, in the next few weeks.

The SBI decision to buy stock from the secondary market will go a long way to revive the sentiment, senior market analysts said. A string of public sector banks, led by Bank of Baroda, is set to follow suit. Since the banking sector posted a Rs 96,000 crore deposit growth in the last fiscal, the total investible funds available with the industry is around Rs 5,000 crore.

"You can imagine what kind of impact it will have on the market if all banks start buying stocks ," Verma said. SBI will invest in both the dematerialised segment and theusual paper-based market. Investment by banks in stockmarkets has been a long-standing demand by market players to revive the sentiment. One of the suggestions made by the Bombay Stock Exchange to finance minister Yashwant Sinha in its pre-budget memorandum was to encourage banks to invest in secondary stocks. Bombay Stock Exchange has suggested that "banks should be encouraged to invest through LIC, GIC and UTI if they do not possess the necessary expertise".

The RBI had liberalised the policy on allowing banks to make stockmarket purchases in April 1997. But none of the public sector banks, except for a brief foray by Bank of Baroda last year, ventured to enter the secondary market till recently.