The proposed move to bring down government holding in State Bank of India (SBI) to 51% from about 59% now could help the lender raise around Rs12,000 crore, a top SBI official said here today.
"We now have a headroom to raise Rs12,000 crore," SBI chief financial officer, SS Ranjan told PTI 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%.
Government is the largest shareholder of the banking behemoth with a majority 59.41% stake.
With the amendment to the State Bank of India (Amendment) Bill, the government can now reduce its ownership in the bank by around 8% to up to 51%. The capital infusion can either happen through a rights issue or by way of other financial instruments.
Insurance companies currently own 11.23% stake in the bank while the FII holding, as at September 30, stands at 9.87%. The Reserve Bank of India had a majority stake in SBI, which was subsequently transfered to the government.
State Bank, which controls a fifth of the country's banking system in terms of assets, will be needing Rs36,000 crore over the next five years to maintain a capital adequacy ratio of 12%.
Last year, SBI had raised Rs 16,700 crore through a rights issue. The lender clocked a business growth of Rs2,37,104 crore at the end of September, 2009, which is a growth of 21% as compared to the year-ago period.
Deposits of the bank went up from Rs6,17,524 crore a year-back to Rs7,72,904 crore. Gross advances went up from Rs4,98,513 crore as on September FY09 to Rs5,80,237 crore in Q2 FY 10. The Bill is likely to be introduced in the current session of Parliament, sources said.
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