The bank was earlier looking for Rs 20,000 crore from the government, but now has come down to Rs 5,000 crore-Rs 15,000 crore.

Pratip Chaudhri, chairman of SBI was quoted by the media that bank and the governmetn is working together to arrive at the number. He also disclosed that a part of the funding will come from internal accruals. He further added, “The amount we have put on the table is between Rs 5,000 crore and 5,000 crore from the government."

There were no clear indication from the Chairman as to when this rights issue will take place. The bank has been working to get a rights issue since last financial results, the idea was to ramp up its capital base to fuel growth.

SBI is in dire need of capital infusion to support its growth, the bank's capital adequacy ratio has declined to 7.8%. the most alarming part is that the bank's Tier-I capital fell below 8%. Even when regulatory requirement for Tier-I capital is 6%, the government has directed that the bank keeps it above at a minimum of 8%. The bank's provision level fell after it made provisions of Rs 8,000 crore from its capital reserves for its pension liabilities.

SBI has also lowered its growth projections, while earlier the projection was 20-22% growth in loan for FY12, now it has revised it down to 16-19% growth. The Reserve Bank of India, banking regulator, too reduced the banking sector's loan growth projection for FY12 to 18% during the first quarterly review of the monetary policy in July. In its annual policy review in May, the central bank had projected growth at the rate of 19%.

Experts are not too confident if the government will support the issue this year; considering the weak position of government finances. Currently the government owns 59% in SBI.

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