SBI mulling rights issue to raise funds
Following a meeting that the PSBs had with finance minister P Chidambaram, SBI chairman Pratip Chaudhuri told reporters that after the government comes out with the capital allocation for PSBs, his bank would look into the need to raise capital through a rights issue.
The size of the rights issue is likely to be contingent on the capital infusion. FE had reported in August that the government may infuse an additional R4,000 crore in SBI by March-end 2013. In the last fiscal, the government had infused R7,900 crore in SBI.
Earlier, Chidambaram told reporters, “Most banks would require additional capital. We have Budgetary provision for infusing additional capital and decision would be taken in the next few weeks about infusing additional capital into banks.” However, he said that the government cannot infuse more than the Budgetary provision of R15,000 crore, adding “We will have to allocate R15,000 crore, which is being done by the (financial services) department.”
The minister further said, “All but one bank have Tier I capital
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