SBI to get fresh capital of Rs6,000 crore this fiscal

The State Bank of India (SBI) will get a fresh dose of capital of up to Rs6,000 crore, through preferential issue to the Government of India, before the close of the current fiscal, reports quoting its chairman Pratip Chaudhuri said today.

The proposed capital infusion, part of the government's efforts to recapitalise state-run banks to make them compliant with Basel II norms, will take SBI's Tier-1 capital to 9 per cent, according to Chaudhuri.

SBI's Tier-I capital stood at 7.7 per cent, below the 8 per cent level desired by the government while its total capital adequacy ratio stood at 11.4 per cent as of the September quarter.

SBI had, earlier, announced plans to raise up to Rs20,000 crore through a rights issue, but had to delay it as the government had no funds to subscribe to almost two-thirds of the issue. The government holds 59.4 per cent stake in SBI.

The government is also expected to infuse fresh capital into other state-run lenders, including Bank of Baroda, Bank of Maharashtra, Union Bank etc.

Bank of Baroda is expected to get fresh capital of Rs775 crore this fiscal, while Bank of Maharashtra will get Rs860 crore through the preferential issue route.