SBI will change its rights share sale plan: Report

Posted By: Religare
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SBI will change its rights share
“State Bank of India, country"s largest money lender, will issue its $4.5 billion rights share next financial year as government which is its biggest shareholder, is unable to put in the money", a business daily reported on Tuesday.

A senior finance ministry official said, “Bank find it difficult to take out the funds in the current fiscal year and at 9% adequacy ratio, it would be much costlier to raise money from the international markets".

Government find it difficult to put in Rs 11,000-12,000 crore required to keep its shareholding in State Bank of India.

Last year SBI announced a Rs, 39,000-crore capital raising plan by the next five years, is now planning to raise Rs, 20,000 crore through a rights issue in order to sustain and for the growth of the business. Government"s inability to fund the money could lead SBI to face a slow growth rate throughout the financial year.

A finance ministry official who did not want his name to be disclosed, said that “SBI has enough funds for now", which differs from the statement which says, “Bank will suffer in the coming financial year due to scarcity of funds which were supposed to come from the Indian government".

SBI is expected to launch the rights offering in the month of June, this year.

Read more about: sbi, bank, bse, nse
Story first published: Wednesday, May 18, 2011, 9:30 [IST]
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