SBI's international branches stepped into the troubled waters of the south-east Asian economic disaster to buy debt papers issued by public sector majors like Indian Oil Corporation (IOC), Oil & Natural Gas Commission (ONGC), Power Finance Corporation (PFC), and some private-sector debt paper.

Trading on this cheaply acquired paper substantially bolstered the contribution of these international branches to SBI's sharp 85 per cent rise in operating profit during the first half of the current fiscal.

"SBI's stepping in has turned out to be a real plus for the domestic corporate sector," said a senior finance executive, "prices had really declined, and the last thing we wanted was that the Korean and Japanese banks should suffer on our account, because thatwould have created a negative impression of Indian paper."

"But with SBI stepping in," he said, "they managed to find a market for our paper, which gave them a vital exit route and some much-needed liquidity. SBI, on the other hand, quickly found other buyers and, therefore, made good margins. Both sides were satisfied."

SBI sources confirmed the purchase of the overseas debt paper, and said the amount spent on the investment ran into several million dollars.

SBI did not, however, have unmixed good fortune in the south-east Asian economic disaster. It is believed that one international branch, based in Singapore, has run up some problem loans in the troubled economy of Indonesia, for which hectic recovery efforts are on.

Public-sector oil companies have a special relationship with SBI, which also acts as their forex procurer in the merchant forex market. In the process, SBI sometimes has to take hits, but on the whole, the oil PSUs constitute a substantial chunk of the bank's business, saidsources.

The international branches have now come to contribute as much as 11 per cent of the country's largest commercial bank's business, and this is expected to go up further in future with improved co-ordination and communication between SBI's vast domestic network branches and overseas operations. SBI has 8,888 branches, of which 52 are based overseas.