SBI ready to mobilise equity funds through IPOs
The size of equity issue will depend on the approval of amendments to the SBI Act by Parliament, reports KA Badrinath.india Updated: Dec 08, 2006 20:22 IST
The State Bank of India (SBI) is getting ready to mobilise equity funds through a public offer in the next financial year.
The size of equity issue will depend on the approval of amendments to the SBI Act by Parliament. The changes in the SBI Act will limit the RBI stake in the bank to 51 per cent from the current actual holding of 59 per cent.
Presently, the RBI can dilute its stake in SBI to 55 per cent equity as per the existing norms.
"For raising tier-1 capital, we are awaiting approval of the amendments to the SBI Act. We will not be able to do so before the next financial year," SBI Chairman OP Bhat told reporters on the sidelines of the London School of Economics Asia Forum conference in the capital on Thursday.
Even at present, the SBI can float a public issue leading to dilution of the RBI's stake to 55 per cent. But, if the size of the issue is larger, if the bank goes for equity funds from public, it can only be after the amendments to the SBI Act are adopted by Parliament.
The move is to limit the government's holding in SBI via RBI to 51 per cent on par with other public sector banks.
Bhat also stated that during the next three months, the bank will mop up an additional Rs 2000 crore in tier-2 capital owing to the mismatch in deposits growth and demand for credit offtake.
First Published: Dec 07, 2006 22:56 IST