SBH plans to raise Rs 900 crore

BANKS GEAR UP FOR BASEL-II

State Bank of Hyderabad (SBH) will raise Rs 900 crore to meet Basel-II compliance requirements for Accounting Standards 15 (AS15) as well as for the next year's expansion plans.

Speaking to Business Standard on Friday, Amitabha Guha, managing director, State Bank of Hyderabad, said Rs 500 crore had been mobilised so far via the upper tier-II mode since March 18 this year, while the remainder would be sourced through perpetual bonds.

The fund-raising has become necessary due to a one-time provisioning of around Rs 450 crore by the bank to meet AS15 requirements.

On the AS15 front, the bank has two options "" adoption in phases over a period of five years or implementation in one go.

"We will prefer to do it the latter way," Guha said.

After the mobilisation of the proposed capital, the capital adequacy ratio of the bank would be 10.50 per cent compared with 12.5 per cent as measured under Basel-I, he added.