SBI to raise Rs 800-1,200 cr by issuing shares to employees

Mar 08 2014, 04:58 IST
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SummaryThe public sector bank is planning to introduce the scheme in the next financial year...

The country’s largest lender, State Bank of India (SBI), on Friday said it is planning a share-purchase programme worth Rs 800-1,200 crore for its employees in the next financial year.

“We have written to the government to allow us to do a share-purchase scheme. We would like our employees to also be owners,” SBI chairperson & managing director Arundhati Bhattacharya told reporters on the sidelines of an event at the Tata Medical Center in the city.

According to Bhattacharya, the stocks would be offered at a discount to all employees of the bank. “There would be a discount, otherwise it does not make sense as they can buy it from the market. The size of the issue will depend on the price at which the shares will be offered. We expect it to be somewhere between R800 crore and R1,200 crore,” she said.

The public sector bank is planning to introduce the scheme in the next financial year, subject to the approval of the shareholders and the government.

At present SBI has more than 2,28,000 employees and the government holding in the bank as of February this year stood at 58.6%. Bhattacharya further said the bank was making efforts to trim down bad loans and looking to improve asset quality. The bank is also scouting for opportunities to sell bad assets to asset reconstruction companies.

The state-run lender’s gross NPA ratio rose to 5.73% at the end of December quarter this fiscal from 5.3% in the corresponding period last fiscal.

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