Mumbai: State Bank of India (SBI), the country’s largest bank, said on Monday it seeks to raise up to Rs 25,000 crore during the current financial year, including up to Rs 5,000 crore through bonds to meet capital adequacy norms. The central board of the bank gave its approval to two proposals of the bank, State Bank of India (SBI) said in a regulatory filing.
The board accorded approval to the bank to raise Basel III compliant Tier 2 bonds up to Rs 5,000 crore in USD/domestic currency to overseas and/or Indian investors during 2018-19, through a public offer/private placement. The mode of fund raising will be decided at the “opportune time” subject to the approval of shareholders, the RBI and Sebi.
For tier-II bonds, the bank has the approval to sell securities to Indian as well as overseas investors through public offer and private placement. SBI is adequately capitalised at the moment and the fund-raising is an enabling resolution, which will allow the bank to tap markets when required, Prashant Kumar, chief financial officer, said.
As of June 30, SBI’s capital adequacy ratio was 13.31 per cent, above the regulatory minimum requirement of 9 per cent. Of the total, tier-I capital was 10.67 per cent. In June, the bank had raised Rs 15,000 crore through QIP. It had also raised Rs 8,800 crore in the previous financial year as part of the government’s recapitalisation programme for public sector banks.
The country’s largest state-owned lender had reported a net loss of Rs 4,876 crore in Apr-Jun, its third consecutive quarter of loss. This was mainly because of elevated provisioning for bad loans and marked-to-market losses on its bond portfolio.
