SBI will get Rs 6,000-8,000 cr capital infusion by March

The State Bank of India has said the Government has approved a capital infusion of Rs 6,000-8,000 crore. The funds will come by March 31.

Mr Pratip Chaudhuri, Chairman, SBI, said, “The Ministry had approved it long back. Even the Planning Commission approval is in place. So it (capital infusion) should be between Rs 6,000 crore and Rs 8,000 crore.” It should be done before March 31, he told reporters here.

The Government has already announced that it is committed to providing adequate capital to public sector banks so as to maintain their Tier-I capital at 8 per cent.

As of September 2011, the capital adequacy ratio (CAR) of SBI stood at 11.4 per cent. Of this, Tier-I capital stood at 7.47 per cent at the end of second quarter against the minimum 8 per cent level desired by the Government.

In 2010-11, the Government provided capital support of Rs 20,157 crore to public sector banks.

SBI had submitted a proposal some months ago to raise Rs 20,000 crore through a rights issue. The bank requires Rs 20,000 crore to fund its growth plans over the next two fiscals.

No Rate Cut

On another note, Mr Chaudhuri said the RBI may not cut rates immediately. “I am not very hopeful,” he replied to a question on the possibility of an interest rate cut. His remark is significant especially when the industry is expecting an interest rate cut at a time when the headline inflation has moderated to a two-year low, touching 7.47 per cent in December 2011.

Shishir.s@thehindu.co.in