India’s biggest lender the State Bank of India (SBI), which is looking to raise as much as Rs 40,000 crore in the next three years, may have the government’s nod to explore American depositories as well as debt to shore up its capital base.
The government is the single largest shareholder in the firm at about 59 per cent.
The new fiscal will bring good tidings for SBI. The government is planning to help SBI raise big-ticket money to fund an aggressive credit growth of over 20 per cent. Although the mechanism of funds is yet to be decided, the government is waiting to hear from the SBI management on the exact quantum of funds to be raised.
Some time back, the SBI top brass had informally indicated a Rs 40,000 crore requirement over the next three fiscals.
In the meanwhile, the finance ministry has not ruled out bonds, preference capital or even an ADR or American depository receipt issue.
The finance ministry is hopeful of a decision sometime after the first quarter of the new fiscal.
In the meanwhile, finance minister Pranab Mukherjee has tabled the SBI Amendment Bill in Parliament through which the government proposes to pare its shareholding in the bank to 51 per cent.
However, banking secretary R Gopalan told NDTV that the finance ministry is working in the current framework of as things are.
With the government setting an internal credit growth target of at least 20 per cent for all public sector banks (PSBs) in the new fiscal, the clamour for more funds to fuel this growth will only get louder among government banks.
And particularly in the case of SBI, whose requirements are very high, to be made good via the government’s recapitalisation plan of Rs 16,500 crore announced in the budget.
