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Friday, September 2, 2011

Rights issue is on track, says SBI chief

State Bank India (SBI) today said its Rs 20,000 crore rights issue proposal was on track and the bank was not looking at any other options to raise capital.

"Government of India, Department of Financial Services is very much looking into it (rights issue proposal). As of now, there is no interim response (from the government) but it is receiving attention," SBI Chairman Pratip Chaudhuri said.

"There is no question of looking at any other option but rights issue is very much on the track," he said, adding, "The amount will be finalised after we hear from the government".

The country's largest bank submitted proposal for capital infusion a few weeks ago.

"We have made our proposal to the government giving different scenarios and different levels of capital adequacy which requires different levels of capital," he said.

As per the proposal, SBI requires Rs 20,000 crore to fund its growth plans over the next two fiscals.

It is also function of percentage of government's holding in the bank, he said.

Currently, the government has a 59.4% 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% of the total rights being issued.

Source: Business Standard


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