SBI needs Rs 8,000 cr by March to take its Tier-I ratio to 8%

State Bank of India (SBI) will need Rs 8,000 crore to take its Tier-I capital adequacy ratio to eight per cent by March 2012.

The country’s largest commercial bank closed the April-June quarter with a capital adequacy ratio of 11.6 per cent and Tier-I ratio of 7.6 per cent. It is yet to detail its second quarter earnings.

“We need to raise Rs 8,000 crore before March to keep Tier-I capital adequacy ratio at eight per cent,” Diwakar Gupta, managing director and chief financial officer of SBI, told reporters here on Sunday.

The current norms mandate banks to keep their capital adequacy ratio at nine per cent and Tier-I capital at six per cent. However, the government prefers that banks have Tier-I capital adequacy ratio of eight per cent.

On Saturday, SBI Chairman Pratip Chaudhuri had said the government had agreed to infuse Rs 4,000-crore capital into the bank. He had also said the bank would need Rs 30,000-40,000 crore over the next three years to meet its business needs.

The capital requirement of the bank will be partly funded by shareholders, including the government, and the rest will be financed through internal accruals and economising of capital usage.

Separately, Gupta said SBI had no immediate plans to raise its lending rates.

“We increase lending rates if there is a rise in the cost of funds. Currently, liquidity is comfortable and we don’t see a major repricing of our liabilities. We will be happy to keep lending rates unchanged for now, because rates are already high and it is hurting the borrowers,” he said.

The Reserve Bank of India (RBI) has raised key policy rates 375 basis points in 13 tranches since March 2011, to tame rising inflation numbers. The last time the central bank increased rates was in late October, when the hike was by 25 basis points.