State Bank of India may go in for a follow-on-public-offer (FPO) next fiscal to fund its business growth, its Chairman, Mr Pratip Chaudhuri has said. After April, the bank will initiate discussions with the Government to seek the latter's views on whether Government stake could be brought down from 62 per cent through avenues such as FPO or institutional placement of shares, he said.

SBI is likely to get capital infusion of Rs 7,900 crore from the Centre this month, which will take the Government stake in the bank to 62 per cent. Once this capital infusion happens, SBI's tier-I capital will go up to 9 per cent, Mr Chaudhuri said.

The country's largest commercial bank will then approach the credit rating agencies for review of its credit ratings.

Mr Chaudhuri also pointed out there was enough room for the Government to bring down its stake in the bank as the minimum Government holding prescribed under law was 51 per cent. He noted that it would not be appropriate to only look at Government for capital needs of the bank.

ONGC issue

On whether SBI had participated in the recent ONGC share auction, Mr Chaudhuri said that the bank had bid for the ONGC shares as it felt that it was good investment proposition.

“ONGC is a blue-chip company. Given the strength and fundamentals of that company, our investment committee decided to bid for it. It is pure investment for us', he said, adding that it was not any form of rescue act to ensure success of the auction. He, however, declined to comment on the number of ONGC shares bid by the bank.

Meanwhile, for the current fiscal SBI is looking at net interest margin of 3.80 per cent. The interest spread has been good in the fourth quarter, Mr Chaudhuri said.

> krsrivats@thehindu.co.in

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