SBI gets approval for Rs 60-80 billion infusion: TV
State Bank of India, India's largest lender, has received Finance Ministry approval for a capital infusion of Rs 60-80 billion, CNBC-TV18 reported on Monday, citing the bank's chairman.
The capital infusion will be made by March 31 and will be via a preferential issue of shares, Pratip Chaudhuri was reported as saying.
Late last month, Diwaker Gupta, chief financial officer, told Reuters the bank had received formal confirmation from the government on capital infusion.
The bank, which is 59 per cent state-owned, has since 2010 sought as much as Rs 200 billion from the government through a rights issue in order to build up its capital base.
In early October, Moody's downgraded the standalone rating for State Bank of India, the country's dominant lender, citing "modest" capital and weakening asset quality.
Gupta had said the government will ensure the bank has 8 per cent tier I capital adequacy by March-end. At the end of September, it stood at 7.47 per cent.
Earlier this month, Standard and Poor's said the Reserve Bank of India's proposed guidelines for implementing Basel-III norms will strengthen bank's capitalisation and credit profile.
The RBI said banks should have minimum tier-I capital of 7 per cent, while total capital must be at least 9 percent of risk-weighted assets under the Basel III draft guidelines.
Shares in the state-run lender rose as much as 2.6 per cent to Rs 1,825 immediately after the report.
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