State Bank of India (SBI), the country's top lender, will get fresh infusion of government funds to the tune of Rs7,900 crore, which would help the state-run bank to increase lending and shore up its capital base for the approaching Basel III regime.
The capital infusion will be through preferential issue to the government, which would include the premium as well, SBI said in a filing with the Bombay Stock Exchange (BSE).
The government currently holds 59.4 per cent in the equity capital of SBI and the latest capital infusion will take its stake in SBI to 65 per cent.
The capital infusion will also raise SBI's tier I capital to about 8 per cent.
As of September 2011, SBI's tier-I capital stood at 7.47 per while its overall capital adequacy ratio (CAR) stood at 11.4 per cent.
SBI had, last year, submitted a proposal to the government for raising Rs20,000 crore through a rights issue to fund its growth plans over the next two fiscals.