To issue preferential shares to Centre

State Bank of India (SBI) is likely to get a capital infusion of about Rs 3,000 crore from the Centre by March-end, Chairman Pratip Chaudhuri has said.

This capital infusion would not come through a rights issue but in the form of a preferential allotment of shares to the Centre, Chaudhuri said here on Monday.

He made it clear that the bank had not sought any capital and that it was the Government that had indicated infusion of Rs 3,000 crore.

“This (capital infusion by the Government) should happen by March 31,” Chaudhuri said

The capital infusion will be part of the Rs 12,000 crore that the Government intends to pump in various banks this month. The Cabinet may consider capital-infusion proposals of banks this week.

Last fiscal, the Centre had infused Rs 7,900 crore in SBI, taking the Government holding to 61.58 per cent from 59.4 per cent .

On expectations from the upcoming monetary policy review, Chaudhuri said he expected a 50-100 basis-point cut in the cash reserve ratio and a 50 basis-point cut in the repo rate.

(This article was published on January 7, 2013)
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