SBI may get Rs 4,000 cr capital support from govt

The Finance Ministry is actively looking into a proposal to infuse Rs 4,000 crore in State Bank of India to boost its capital base, and a decision in this regard would be taken in the next few months.

"The bank has submitted its capital requirement plan and the Finance Ministry is considering the proposal of SBI for the capital infusion of about Rs 4,000 crore for the current fiscal," official sources said.

The decision would be taken in the next couple of months, sources added.

Last fiscal, the government had infused Rs 7,900 crore in SBI to increase the Tier-I capital of the bank.

Following the capital infusion in March 2012, the government holding in the bank rose to 61.58% from 59.4%.

SBI had raised over Rs 16,000 crore through a rights issue in 2008. In the last SBI rights issue, government's contribution was in the form of bonds instead of cash.

The government has already said it will infuse about Rs 15,500 crore in public sector banks during the current fiscal to enhance their financial strength.

"I understand the problems, the constraints under which the Indian banking system is suffering for some time. We are trying to help them as you have noticed in the last two years in order to build up the capital adequacy of the Indian banking system particularly public sector banks, I have injected Rs 32,000 crore," the then Finance Minister Pranab Mukherjee had said.

"To improve the capital adequacy of the public sector banks, I am going to provide around Rs 15,500 crore in 2012-13 because we want our banks should have adequate capital so that they can be in a position to compete with the others," he had said.

During 2011-12, public sector banks got Rs 12,000 crore for improving their capital adequacy ratio.

The government pumped in Rs 20,157 crore in public sector banks in 2010-11 to maintain tier I capital at 8% and increase government's equity in some banks to 58% in 2010-11.