Government to pump upto Rs80 billion in SBI
13 Oct 2011
The government plans to pump Rs45 billion to Rs80 billion of funds in top lender State Bank of India (SBI) by March 2012, according to D K Mittal, secretary of financial services.
State-run SBI, whose footprint extends across a quarter of lending in India, has suffered a hit from higher provisions for bad loans and lower profits in the last two quarters, and has since last year sought as much as Rs200 billion from the federal government through a rights issue.
The lender hopes surpluses earned during the year, apart from government funds, would help its boost Tier-I capital to 9 per cent.
The bank's Tier 1 capital stood at 7.6 per cent at the end of June, below the government's pledged 8 per cent target in state banks.
The lender had its ratings downgraded by Moody's from D+ from C- on a scale of A to E, on low Tier 1 capital, its recent failure to raise capital and worsening asset quality.
Meanwhile, in a bid to strengthen its presence in Gulf region, State Bank of India (SBI) plans to launch a range of services aimed at non-resident Indians in the UAE, including opening of NRI accounts, according to a senior bank official.
