SBI to seek govt nod for Rs 20K cr rights issue

The country's largest lender State Bank of India (SBI) today said it will approach the government next fiscal to seek approval to raise Rs 20,000 crore through rights issue.

"Next year," SBI Chairman O P Bhatt told reporters to a query when the bank intends to approach the government for seeking approval for rights issue.

Bhatt has already announced that the bank intends to come put with a Rs 20,000-crore rights issue for meeting capital requirements.

The bank chief had earlier said that the lender would prefer a rights issue to dilution of government holding for raising funds.

"I want the government to continue to be the major stakeholder in the SBI... If there is an opportunity to raise capital quickly and efficiently, we would like to do that (rights issue)," Bhatt had said.

The government currently holds 59.7 per cent in the SBI.

Rights issue is a mode of capital raising, where the company issues shares to its existing shareholders.

According to Bhatt, SBI needs to raise around Rs 40,000 crore over the next five years to support its business plans. Currently, SBI has capital adequacy ratio of nearly 14 per cent.