SBI gets board approval to raise Rs 50,000 crore through bonds in FY24

State Bank of India (SBI), the country’s largest lender, will raise Rs 50,000 crore by way of bonds, including additional tier-1 bonds and tier-II bonds, in the current financial year.

In a notification to the stock exchanges on Friday, SBI said the central board of the bank had approved raising of funds by debt instruments.

SBI said the funds would be raised through private placement mode to Indian and/or overseas investors during the financial year, subject to the central government’s approval wherever required.

In April, the SBI board had approved funds raising of $2 billion through foreign currency bonds in 2023-24 in single or multiple tranches.

The fundraise activity comes on the back of healthy credit growth in the banking system, though deposit growth has been lagging loan offtake.

In FY23, credit growth was 15 per cent while deposit growth trailed at 9.6 per cent. According to the latest Reserve Bank of India (RBI) data, year-on-year credit growth of banks stood at 15.4 per cent as on fortnight ended May 19, while deposits were growing at 10.9 per cent. Deposit growth is expected to improve as the Rs 2,000 banknotes are coming back to banks after the RBI announced its withdrawal.

SBI’s net profit for the previous financial year was Rs 50,232 crore – its highest ever yearly profit.