Govt is quite committed on rights issue, says SBI chairman

Aug 29, 2011 |

mumbai

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State Bank of India chairman Pratip Chaudhuri on Monday said Government is 'quite committed' to infuse funds through the bank's proposed Rs 20,000 crore rights issue.

"The Government is quite committed on the rights issue and it is not right for the bank to put a finger on the quantum," Chaudhuri told reporters on the sidelines of an event here.

The Government had last week indicated that the rights issue will happen this fiscal itself. According to official sources, the infusion will come through as the Government wants to push the tier-I capital to over 8 per cent.

SBI, the country's largest lender, had a total capital adequacy of 11.6 per cent as on June 30 while the core tier-I component stood at 7.6 per cent.

The bank's Chief Financial Officer Diwakar Gupta had last week said that it can see through this fiscal considering its credit growth targets but will definitely need to augment it in next fiscal.

Chaudhuri on Monday said the bank is looking at a credit growth of 16-19 per cent for the fiscal.

Presently, Government has a 59.4 per cent stake in the bank. In case a rights issue is approved and the Government wants to retain its holding at the current level, it would need to subscribe to 59.4 per cent of the total rights being issued.

The SBI chairman added that the bank is sufficiently capitalised on tier-II and will not be looking at any bond sale in the near term.

SBI will be adding 600 to 800 branches to its present network of over 13,000 branches, he said.

Chaudhuri was speaking to reporters at a civic body run school in south Mumbai's Colaba area after announcing help for the school as a part of the bank's corporate social responsibility activities.

He said the bank will be spending Rs 80 crore this fiscal on CSR initiatives which will involve donation of ten fans each to a school in the vicinity of all the 13,000 branches.

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