The government on Friday gave a much-awaited nod to the nation’s leading lending institution State Bank of India to enhance equity by Rs 10,000 crore, a move that would help the bank meet its capital requirement.
Announcing the decision taken at the Union Cabinet on Thursday night, the Information and Broadcasting Minister P R Dasmunsi told reporters that the bank would enhance the capital by subscribing to the Rights issue of equity shares.
This would be done against issue of marketable government securities and Statutory Liquidity Ratio.
The details of the issue including the number of shares to be subscribed, the amount to be subscribed, coupe rate and tenure of the securities would be worked out by the government in consultation with the bank, in accordance with Sebi guidelines and market conditions.
The government has a 59.73 per cent equity in the bank, whose share value shot up by over Rs 50 within minutes of the announcement of the decision. In the morning hours, SBI shares were quoted at Rs 2,322, an increase of over 2 per cent, at the Bombay Stock Exchange.
