Kolkata, Nov 14 (IANS): The country's largest public sector bank, State Bank of India (SBI) is going to expand its network of branches in Bangladesh, despite a recent downgrading of its credit rating by Moody's, an official said Sunday.

The bank said it was planning to open two more branches in Bangladesh by December 2012 after opening two new branches at Rajshahi and Khulna recently.

Moody's recently downgraded its rating of SBI's financial strength by one notch to 'D+' on account of the lender's low Tier-I capital ratio and deteriorating asset quality.

"We have recently got two licences and have opened two branches at Rajshahi and Khulna, expanding from the two earlier branches - Dhaka and Chittagong," SBI chairman Pratip Chaudhuri said on the sidelines of a conference organised by Assocham here.

"The Bangladesh government assured us that the moment we roll them out (two branches at Rajshahi and Khulna) and once they stabilise, two more licences will be given. We are expecting all together six branches in Bangladesh in one year's time, that is, by December 2012," he said.

The bank has planned to open the two branches at Narayangunj and Chittagong.

SBI is eyeing to capture the home loan retail market and wholesale market in Bangladesh in the absence of lesser availability of long-term finances in the country.

Informing that the SBI's exposure in Bangladesh was about Rs.1,350 crore, Chaudhuri said: "New homes are coming up (in Bangladesh). We will do retail and wholesale home loan business. It has a huge potential in terms of reach. Bangladesh home loan market is a huge potential."