SBI's Rs. 20,000-cr mega-rights issue in next fiscal: O P Bhatt

India's largest lender State Bank of India's keenly awaited Rs. 20,000-crore rights issue will only come early next financial year for want of approvals from the Government, its chairman today said.

"There is a process in the government which is a part of the Budget, but not next year's Budget, it is this year's Budget...since so far we have not heard about the rights issue, it seems difficult that we will be able to get the rights issue before the (end of) current financial year," the bank's Chairman O P Bhatt told reporters here.

"Hopefully, it will happen during the early part of next financial year," Bhatt said, speaking on the sidelines of an Indian Banks Association (IBA) conference here.

SBI had earlier announced its intention of coming out with the rights issue in the last quarter of FY11 and had said that it is looking at raising up to Rs. 20,000 crore through it.

The government, which owns 59.4 per cent in the bank, will have to contribute up to Rs. 12,000 crore to subscribe to the issue. It was earlier reported the Department of Financial Services had cleared the issue but considering the large outlay from the government, it requires some budgetary support or approvals.

SBI has earlier said the rights offering is being planned, keeping in mind the pace of growth in the economy.

The bank had raised over Rs. 16,000 crore through a rights issue in 2008 which was well received, even though it came after the Lehman Brothers collapse, which had shattered investor confidence.

Source: Financial Express