Amid rising fiscal deficit, the finance ministry last month asked the PSBs to submit their requirement of capital for the next three years in order to maintain their capital adequacy ratio at over 12% while growing their business.
The move was also aimed at finding whether the government would be in a position to provide these funds or would have to allow these banks to raise resources by diluting the government stake.
SBI, the largest commercial bank in the country, tops the list of banks that need capital from the government.
SBI MD & CFO Diwakar Gupta said, As our assets are growing by R1.5 lakh crore every year, we need at least 10% of it (R15,000 crore) in the form of capital infusion to maintain this growth. It means that our bank requires funds of around R45,000 crore for the next three years in absolute terms. We are waiting for the government nod to our proposed rights issue. After getting a clear signal, we will decide about other modes of fund-raising, which may include bonds.
Punjab National Bank ED Rakesh Sethi said, Our bank would need a sum of R15,000 crore in the form of government equity to keep the business growth momentum at the required pace for the next three years. We have projected our business growth at 23-25% during the next three years.
Canara Bank ED Archana Bhargava said though the bank did not need any capital for its business growth for this financial year, it would need a sum of R927 crore during the next financial year.
We will again require a sum of R6,496 crore during 2013-14, she said. Canara Bank needs such a huge capital as in 2013-14 its risk weighted assets (RWA) will go up to R3,50,000 crore against the current level of R1,76,000 crore. At present, the government holds 67.7% in Canara Bank.
Indian Overseas Bank CMD M Narendra said the bank needs a sum of R3,500 crore to R4,000 crore in the form of government equity for the next three years. In the current year itself, the bank needs R1,200-1,400 crore capital.
Though our preference will be to get the money in the form of government equity, still we have kept our options open to go for other routes like QIP, preferential shares and the rights issue or even FPO in case there is any capital shortfall.
Dena Bank CMD DL Rawal said his bank had already received a sum of R539 crore from the government and would require another R700 crore to maintain its capital adequacy ratio at 12% for next three years.
Corporation Bank CFO CG Pinto said the bank would need R534 crore capital in 2010-11 and another R3,000 crore by the end of next financial year and R6,400 crore during 2013-14.
Allahabad Bank ED MR Nayak said, We will need a sum of R3,000 crore to keep our business growth momentum for the next three years. It includes the amount of R1,000 crore during this financial year itself.