SBI mulls rights issue in 2010-11

State Bank of India (SBI) may go for a rights issue in the next financial and will start discussions with the government after the presentation of the Union Budget.

Talking to reporters at the sidelines of a seminar, Chairman OP Bhatt said, “We need some equity and we need it in the next financial year. Our rights issue can be successful, if the government subscribes to it.” Bhatt expects the government to give some indications regarding capital infusion in public sector banks in the Budget.

“There may be some announcements on whether the government wants to give money for bank capitalisation. Based on that, we will start discussions with the government after the Budget,” Bhatt said. The lender seeks to raise Rs 10,000-20,000 crore from the rights issue. Bhatt also said the bank needed to raise around Rs 40,000 crore in the next five years in addition to Tier-II capital and retained earnings.