State Bank of India Chairman O.P. Bhatt on Thursday hinted that the bank may go for a rights share issue. However, he said there was no specific proposal for either a rights issue or a follow on public issue as of now.

?There is no urgency (to raise equity capital). But if we get the timing right and if we are able to get the share issue in which we are interested…we could go for a rights issue for the proportionate amount,? Bhatt said on the sidelines of R K. Talwar Memorial Lecture.

The SBI chief said since the government has announced its intention to inject capital into state-owned banks, SBI could also be a beneficiary, provided it is on the list of banks to be capitalised.

Government sources, however, said in New Delhi there was no proposal to dilute the state stake in the bank through either direct disinvestment or issuing of fresh capital in the market.

There has been speculations in the market about SBI seeking government nod to tap the market for raising capital for meeting its growth plans. The government?s stake in SBI is around 59% and a Bill is pending in Parliament to amend the SBI Act, 1955 so that the minimum government holding in SBI can fall to 51%. As per the Act, the government?s minimum holding currently can go down to 55%. There have been reports that the government may take up the SBI Act Amendment Bill in August.

Official sources said the bank has sufficient resources to meet its growth plans and it does not require a fresh injection of funds through equity sale unless it wants to acquire a financial entity. ?There is no proposal at the moment from SBI to raise funds from the capital market which would result in dilution of the government?s stake in the bank,? the sources said.

Bhatt further said the bank sees a lower credit growth in the first half of the current financial year. However, there would be a betterment in its net interest margin (NIM) during the quarter, he told reporters.

He also said surplus liquidity in the banking system and lack of credit demand may bring down interest rates in the near term. On the merger between SBI and State Bank of Indore, he said the merger would take place once it gets government approval. This could happen in the next six months, he said.