Money & Banking

'Capital infusion options to be decided by govt'

Anjana Chandramouly Chennai | Updated on March 12, 2018 Published on November 05, 2011

Mr Pratip Chaudhuri, Chairman, State Bank of India. (file photo)   -  The Hindu

The Government of India has committed to infuse Rs 4,000-crore capital into State Bank of India. The options would be discussed and decided by the government, said Mr Pratip Chaudhuri, Chairman, State Bank of India, on the sidelines of Bancon 2011 held here on Saturday.

The infusion could happen through a preferential allotment or rights issue, he added.

According to him, even with a Rs 3,000-crore infusion, the bank would comfortably reach Tier-I adequacy level of 9 per cent.

“There would also be internal surpluses and we would also economise on the capital by pushing assets under the export credit guarantee scheme,” said Mr Chaudhuri.

As assets have also not grown sharply, the bank could do with the above fresh capital. Currently, the bank’s credit growth is at 16-18 per cent.

The bank is also “keeping an eye open” for overseas borrowing, he said. “We have enough cash overseas,” he pointed out, adding that right now, there is no necessity for further borrowing. According to him, the bank has about $1.5 billion of cash.

On lending to power and aviation sectors, Mr Chaudhuri said the issue in lending to the power sector was realisation of sale proceeds from consumers, while the airline sector was “suffering from a problem of over capacity”.

Published on November 05, 2011
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