SBI associates to raise Rs3,000 crore
28 Sep 2006
Mumbai: The associate banks of the State Bank of India (SBI) will raise Rs3,000 crore over the next three years either through rights issue or equity or a combination of both. The funds so raised would be used for both Tier I and Tier II capital structures, although SBI will continue to hold majority stake in these banks, SBI deputy managing director and group executive Y Vijayanand said on the sidelines of an FICCI-IBA conference.
Pointing out that the associate banks have a cash to assets ratio of 11 per cent, he said there was no need for any fund infusion from the parent bank. He also forecast a 25 per cent growth for the banks this fiscal.
"If support is warranted, SBI will put in money but, at present, there is no need for this," he said.
On the question of sale of bad debt to asset reconstruction companies, Vijayanand said the net value of non-performing assets of the associate banks was "very low" and the sale is limited to states where the stamp duty and other regulations are favourable.
