SBI says can raise upto Rs 12K-cr following Bill amendment

The proposed move to bring down government holding in State Bank of India (SBI) to 51 per cent from about 59 per cent now could help the lender raise around Rs 12,000 crore, a top SBI official said here today.

"We now have a headroom to raise Rs 12,000 crore," SBI Chief Financial Officer, S S Ranjan said when asked to comment on reports that the government has cleared a Bill that seeks to lower government equity in the public sector bank to 51 per cent.

The government is the largest shareholder of the banking behemoth with a majority 59.41 per cent stake. With the amendment to the SBI (Amendment) Bill, the government can now reduce its ownership in the bank by around eight per cent to up to 51 per cent.

The capital infusion can either happen through a rights issue or by way of other financial instruments. Insurance companies currently own 11.23 per cent stake in the bank while the FII holding, as at September 30, stands at 9.87 per cent.

The Reserve Bank of India had a majority stake in SBI, which was subsequently transfered to the government. SBI, which controls a fifth of the country's banking system in terms of assets, will be needing Rs 36,000 crore over the next five years to maintain a capital adequacy ratio of 12 per cent.

Last year, SBI had raised Rs 16,700 crore through a rights issue. The lender clocked a business growth of Rs 2,37,104 crore at the end of September, 2009, which is a growth of 21 per cent as compared to the year-ago period.

Deposits of the bank went up from Rs 6,17,524 crore a year-back to Rs 7,72,904 crore. Gross advances went up from Rs 4,98,513 crore as on September FY09 to Rs 5,80,237 crore in Q2 FY 10.

The Bill is likely to be introduced in the current session of Parliament, sources said.