Country's largest lender State Bank of India (SBI) today said that Union Finance Ministry has assured that the bank would be adequately capitalised by March 2012, however, the route to re-capitalise it has not been decided yet.
"Whether it would be a rights issue, preferential or QIP route... it is still not decided," SBI Chairman Pratip Chaudhuri told reporters, replying to a query on when the bank's rights issue is expected to hit the markets.
The Government is the largest shareholder of the bank with 59.4 per cent holding.
"But one thing has been confirmed through the finance secretary that the bank would be adequately capitalised by 2012," Chaudhuri said.
"Our issue is that the government has to take a call what level of ownership it wants to maintain in the bank. If it wants to have 59.4 per cent stake in SBI, then it would be a rights issue," he said.
"If it is to be raised from the level of 59.4 per cent, then it would be a preferential issue, if it has to be lowered, then it has to be through a QIP issue," Chaudhuri said.
The SBI had reported a Tier-I capital adequacy ratio of 7.60 per cent as of June 2011, against the suggested level of 8 per cent.
It is said that such a low Tier-I capital ratio provides an insufficient cushion to support growth and to absorb potentially higher credit costs arising from deteriorating asset quality.
"We have presented all our options to the government, but it has its own process of decision
+1.jpg)
0 comments
Post a Comment