Govt to infuse Rs 6k cr in SBI via preferential issue: Chaudhuri

The government has agreed to infuse fresh capital into State Bank of India (SBI) through a preferential issue and the country’s largest lender would get up to Rs 6,000 crore before this financial year-end, Chairman Pratip Chaudhuri said here on Wednesday.

When asked what could be the quantum of the infusion, he said, “The size will be Rs 5,000 to Rs 6,000 crore.”

He did not give any specific indication about the timing of the issue, though he said it would happen before March 31.

SBI’s total capital adequacy ratio stood at 11.4 per cent as of the September quarter, of which core tier-I capital stood at 7.7 per cent, below the eight per cent-level desired by the government.

It had first announced its intention to raise up to Rs 20,000 crore through a rights issue over a year ago, but the government, which holds a 59.4 per cent stake in the lender, has delayed the proposal as it will have to subscribe to almost two-thirds of the money.

For the past three months, the SBI brass has been realistically pegging the capital infusion size at around Rs 6,000 crore. Last month, Chief Financial Officer Diwakar Gupta said an infusion may happen "any time", while Chaudhuri last week said he has received a letter from the finance ministry on recapitalisation. The recapitalisation would take the bank's Tier-I capital ratio to over nine per cent, he had said.

A slew of lenders, including Bank of Baroda, Bank of Maharashtra and Union Bank have made similar announcements in the recent past.