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SBI to raise Rs20,000 crore via rights issue: report

09 Jun 2010

1

State Bank of India is planning to raise Rs20,000 crore from a rights offer in the second half of the year ending 31 March as demand for loans rises, according to reports.

The bank is also likely to set its main lending rate at 7.5 per cent to 8.5 per cent as it shifts to using a base rate system, according to chairman Om Prakash Bhatt.

Bhatt said further, that the government would likely acquire 60 per cent of the shares on offer.

According to analysts Bhatt is aiming to bolster capital with acceleration of credit growth this year on an economic revival. In May, Bhatt had forecast that the bank's loans would vault more than 20 per cent.

According to the bank it needed about Rs36,000 crore over the next five years to maintain its capital adequacy ratio at about 12 per cent and to increase its business and government was required to hold at least 55 per cent of State Bank under current rules.

The bank also plans to sell as much as Rs2,000 crore worth of bonds to domestic retail investors by September, Bhatt said.

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