Govt to infuse Rs 6,000-cr in SBI via pref issue: Chaudhuri

Posted By: Staff
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Govt to infuse Rs 6,000-cr in SBI
Mumbai, Jan 11 (PTI) The government has agreed to infuse fresh capital into State Bank of India through a preferential issue and the country's largest lender will be getting up to Rs 6,000 crore before the fiscal end, its Chairman Pratip Chaudhuri said here today. "We will be having a preferential issue and will be getting capital through it," Chaudhuri told PTI when asked about the progress on its proposed recapitalisation.

When asked what could be quantum of the infusion, he said, "the size will be Rs 5,000 to Rs 6,000 crore." However, he did not give any specific indication about the timing of the issue but said it will happen before March 31.

SBI's total capital adequacy stood at 11.4 percent as of the September quarter, of which the core tier-I stood at 7.7 percent, below the 8 percent desired by the government.

It had first announced its intention to raise up to Rs 20,000 crore through a rights issue over an year ago, but the government, which holds 59.4 percent stake in the lender, has been postponing it as it will have to make subscribe almost two-thirds of the money.

For the past three months, the SBI brass has been realistically pegging the capital infusion size at around Rs 6,000 crore. Last month, chief financial officer Diwakar Gupta had said an infusion may happen "any time", while Chaudhuri had last week said he had received letter from the finance ministry on recapitalisation. The recapitalisation will take the bank's tier-I to over 9 percent, he had said.

A slew of lenders, including Bank of Baroda, Bank of Maharashtra and Union Bank have made similar announcements in the recent past.

While Bank of Baroda would be getting Rs 775 crore this fiscal. 


Read more about: sbi, preferential, capital, bank, government
Story first published: Wednesday, January 11, 2012, 15:15 [IST]
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