INDIA's largest lender, State Bank of India (SBI) plans to raise share capital of up to Rs 15,000 crore through an equity offering to support loan growth and meet capital adequacy requirements, say media reports.
The public sector bank will seek...shareholders approval for plans for raising capital through a public issue or rights offering or private placement.
The bank may also use the global depository receipt and American depository receipt route to raise money.
SBI's committee of directors for capital raising had decided to take an approval from the shareholders for raising additional equity share capital up, SBI informed the BSE.
The SBI stock closed flat at 329 on the BSE on January 27.
The extraordinary general meetings of shareholders may be held in a month. Shareholders approval is valid for about a year.
It would also approach the Central government, which holds about 58.6 per cent stake, and Reserve Bank of India for a formal approval, senior SBI official said.
Its capital adequacy, (under Basel-III) was 12.2 per cent, with Tier-I of 9.6 percent in September 2014.
In fact, public banks are in urgent need for funds on account of the approach of Basel-III compliance.
According to Global ratings agency Moody’s Investors Service, the 11 state-run banks will need between Rs 1.5 lakh crore and Rs 2.2 lakh crore, or $26 billion and $37 billion, to comply with Basel-III.
The deadline for Basel-III compliance is March 2019.
The government has infused Rs 58,600 crore of capital in state-run banks in the last four financial years and plans to provide another Rs 11,200 crore in 2014-15 (April-March).The capital infusion by the government has broadly been carried out by way of preferential allotment of equity by the banks.