SBI expects capital infusion any time

Written by Reuters | Mumbai | Updated: Dec 31 2011, 09:28am hrs
State Bank of India expects the government to inject capital any time, although it is yet to get a formal commitment on the amount, a senior official said on Friday.

We have a received formal confirmation. It is expected any time, said Diwakar Gupta, chief financial officer. Analysts said the injection could be between R5,000-6,000 crore. Earlier, the lender said it expects a capital infusion of R3,000-4000 crore by December-end.

The bank has since last year sought as much as R20,000 crore from the government through a rights issue to build up its capital base. Analysts said higher subsidy bills and a likely shortfall in the governments target for selling holdings in state firms are likely to limit New Delhis flexibility in injecting cash.

The government is struggling on multiple fronts, with oil subsidy ballooning, and the food subsidy bill on the cards, said Manish Bandi, Fund Manager, IIFL.