The country?s largest lender, State Bank of India (SBI), is planning to raise Rs 18, 000 crore over a period of one year to meet its capital requirement and fuel business growth. The funds will be raised in forms like unsecured and rated rupee innovative perpetual debt instruments, upper tier II, lower tier II, subordinated debt by way of bonds in tranches with a minimum maturity of over 60 months, and via structured deals or by private placement / retail participation.
A senior bank official told FE, on condition of anonymity, that the fund-raising plan was in line with the bank’s business stratergy.
Without disclosing the business plan, the official added that the bank has already become Basel II compliant. Still, the fund raised from bonds could take the capital adequacy ratio under Basel II well above 14%. On Monday, SBI set a coupon of 8.90 % on a 15-year upper tier-II subordinated debt issue totaling Rs 2,000 crore, to be launched on Wednesday.
SBI chairman OP Bhatt had said while declaring second quarter results of the bank. As of September 30, the CAR of the bank as per Basel I norms was 12.14% while the Basel II norms require it to be at 11.51%. Earlier Bhatt had said it would raise a chest of Rs 5,000-10,000 crore for possible foreign acquisitions.