"The tie-up is a sort of insurance to meet a possible borrowing and lending mismatch arising out of RIB repayments," SBI chairman M S Verma told reporters at the international banking conference today.

He said SBI had already tied up with IDFC for Rs 400 crore support after five years. As per the arrangement (known as take-out financing) there would be no obligation on SBI to take the funds from IDFC. "We are confident of meeting the repayment requirements of RIBs as our savings account itself grows by Rs 10,000 crore per annum," he said.

The SBI chief said the bank was getting a spread of 1-1.5 per cent on the RIB funds, including the cost of foreign exchange management. He said there were requests from other financial institutions and banks for funds from the RIB proceeds.

"We haverequests from Power Finance Corporation, Powergrid Corporation, IFCI, ICICI and others for RIB funds," Verma said adding that the funds would be allowed to be deployed only in the infrastructure sector. Verma said SBI would part with Rs 6000 crore from RIB proceeds to 46 collecting banks of the RIB funds for lending to the infrastructure projects.