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‘In-principle’ nod for SBI to raise Rs. 10,000 crore

NEW DELHI: State Bank of India (SBI) has received the Centre’s ‘in-principle’ nod to raise Rs. 10,000 crore from the capital market by March next year.

However, it is yet to be decided whether the funds mop-up is to be through an offering of shares to the public or a rights issue.

“[The] Government has given an in-principal approval to State Bank of India for raising Rs. 10,000-crore capital. However, the mode has still to be finalised,” Financial Services Secretary Vinod Rai told newspersons here on the sidelines of a conference on microfinance on Tuesday.

As for the mode of mop-up, the Government’s stake would stand diluted if SBI is permitted to raise capital through a follow-on public offer (FPO) of shares.

On the other hand, a rights issue would enable the country’s largest lender to raise Tier-I capital without any dilution in the Government’s holding.

At present, the Government’s stake in SBI stands at 59.73 per cent, which can be diluted to 55 per cent under the current provisions.

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