The country's largest bank on Tuesday (July 4) said it has approved the acquisition of the entire stake held by SBI Capital Markets Ltd in SBICAP Ventures Ltd (SVL) by State Bank of India (SBI) for Rs 708 crore.

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SBI Capital Markets Ltd (SBICAPS) is a wholly-owned subsidiary of SBI.

"...we advise that the Executive Committee of the Central Board (ECCB) of the Bank has accorded approval for acquiring the entire stake held by SBICAPS in SVL by SBI, subject to receipt of all regulatory approvals," the lender said in an exchange filing.

The lender had proposed to acquire 6,03,80,000 equity shares or a 100 percent stake currently held by SBICAPS in SVL. The acquisition will be completed after receipt of all regulatory approvals including the go-ahead from RBI, the lender said.

The proposed acquisition is to be done on an arm's length basis and the reason behind SBI's acquisition of SVL is better governance.

SVL was incorporated as a wholly-owned subsidiary of SBICAPS on November 10, 2005, with the objective to carry on the business of asset management, and investment management advisors and to set up, assist in setting up, provide or participate in providing venture capital, technology funds or any other funds for seed capital, risk capital foundation, loans, etc.

Shares of State Bank of India ended at Rs 589.20, up by Rs 3.80, or 0.65 percent, on the BSE.