SBI's rights issue next month: Chaudhuri
Country's largest lender State Bank of India is likely to come out with a rights issue in February to fuel its business plan, a senior bank official said today.business Updated: Jan 08, 2011 23:02 IST
Country's largest lender State Bank of India is likely to come out with a rights issue in February to fuel its business plan, a senior bank official said on Saturday.
"That (Rights issue) is going to happen sometime in February," SBI Deputy MD and Group Executive of International Banking Pratip Chaudhuri told reporters on the sidelines of 9th Pravasi Bharatiya Divas here.
SBI Chairman O P Bhatt in November last year had shared the bank's plans to raise as much as Rs 20,000 crore from the rights issue.
However, there were reports that the government might prune the rights issue size.
Chaudhuri said, "size is yet to be decided and it depends on the amount the government is willing to commit. The government is very much positive."
Parliament in August last year had passed a Bill that would enable SBI to sell shares to boost its capital while allowing the government to reduce its stake to 51 per cent, a change from the previous requirement of government retaining at least 55 per cent share in the public sector lender.
The government at present holds about 59 per cent stake in SBI. If it clears the proposal, the government will have to subscribe the issue to the extent of its holding, so as to maintain its stakeholding at the existing level.