Govt okays SBI plan to raise Rs 9,576 crore via QIP in FY14

Raising of the capital will subject to requisite approvals from the shareholders and the RBI

The country's largest lender, State Bank of India (SBI), on Monday said it had received government approval to raise Rs 9,576 crore through a qualified institutional placement (QIP) in the ongoing financial year. Last month, SBI Chairman Arundhati Bhattacharya had said the state-run bank had sought the government's approval to raise money through the QIP route.

"The government has accorded its approval to SBI to raise Rs 9,576 crore of equity during this financial year from the market by way of a QIP issue on condition that government holding shall not come down below 58 per cent," SBI informed the BSE.

Raising of the capital would be subject to requisite approvals from the shareholders and the Reserve Bank of India, the bank said. The government will infuse Rs 2,000 crore in SBI this year and towards this it will issue preferential shares worth the same quantum to the government.

In October, the SBI board had approved infusion of Rs 2,000 crore by allotting preferential equity shares to the government.     Last week, the bank had informed the exchanges that it had called a shareholders meeting on December 30 to clear both QIP and preferential issues. SBI's capital adequacy ratio stands at 11.69 per cent, with Tier-I capital of 8.73 per cent under the Basel-II norms.