The government is likely to decide on the rights issue proposal of State Bank India (SBI) in the next three months to fund its capital requirement for future business growth.
“We will be taking a call on rights issues or other options through which capital can be infused in SBI within next 2-3 months,” official sources said.
The government would also examine other route of capital infusion like follow-on public offer (FPO), Qualified Institutional Placement (QIP), taking into view the second quarter provisional numbers.
The bank requires as much as Rs 30,000 crore capital over the next three years to fund its business growth without bringing down its Tier-I capital below 9 per cent.
As of June 2011, the Capital Adequacy Ratio (CAR) of the bank stood at 11.6 per cent. Of this, Tier-I capital stood at 7.6 per cent at the end of first quarter, against the government’s desire of minimum 8 per cent.
Last week, SBI Chairman Pratip Chaudhuri had said, “We are already in a dialogue with the government for the rights issue to bring new Tier-I...it should happen by the end of this fiscal“.
Currently, government owns 59.4 per cent in the bank.