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| Law to cut SBI stake likely soon |
| Bloomberg / Nov 05, 2009, 00:31 IST |
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The government planned to amend a law this year allowing it to reduce holding in State Bank of India (SBI) and let the country’s largest lender raise funds, a finance ministry official said.
The government, which is currently required to hold at least 55 per cent stake of the bank, intended to introduce a legislation in both houses of parliament and secure approval when law makers reconvene this month, the official said, declining to be named before an announcement. The government holds 59.4 per cent of SBI, according to Bloomberg data.
The lender, which accounts for a fifth of the country’s banking system by assets, would need Rs 36,000 crore ($7.6 billion) over the next five years to maintain its capital adequacy ratio at 12 per cent and grow credit, Chief Financial Officer SS Ranjan said on November 2. State Bank raised Rs 16,700 crore through its first share sale in more than a decade in March 2008.
Shares of State Bank were unchanged at Rs 2,103 as of 10:39 am local time today in Mumbai. They have gained 63 per cent this year, matching the 61 per cent advance in the benchmark Sensitive Index.
Both the houses of parliament will convene on November 19 for the winter session that will continue until December 22. Parliament has been in recess since the Budget session ended on August 7.
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