Money & Banking

SBI is not looking at any recapitalisation, says MD

PTI Mumbai | Updated on August 27, 2019 Published on August 27, 2019

Arijit Basu,MD, SBI

FM Sithraman's announcement shows that the government is serious about the economy, he said.

The State Bank of India said it is well-capitalised, and that it may not require any fresh funds from the government this financial year.

On Friday, Finance Minister Nirmala Sitharaman had announced an immediate infusion of Rs 70,000 crore into state-run banks to boost liquidity and their lending capacity by Rs 5 lakh crore.

The government had planned a staggered infusion earlier, but the rising tide of bad news on the economy forced its hand to open the purse-strings earlier.

Capital infusion

“For SBI, we are not looking at any recapitalisation right now as we are well-capitalised as we have been able to raise from markets. We have also announced our programme for both Tier-I and Tier-II bonds,” Managing Director Arijit Basu told reporters on the sidelines of an event organised by the industry lobby Indian Chamber of Commerce.

He said the upfront capital infusion will be for those banks which are not in shape to access the market immediately.

Basu said SBI is also looking selling its investment in non-core assets to raise capital.

Earlier this month, SBI Chairman Rajnish Kumar had said the bank would move ahead with the IPO for SBI Cards in Q4, and would delay a share sale in the general insurance arm to next fiscal year. “We have already announced that SBI Cards IPO. We are also looking at some of the other subsidiaries. It is working according to the plan. That is one of the measures by which capital will be coming in,” Basu said.

‘Timely boosters’

Commenting on the recent announcements by the government to boost the sagging growth, Basu said that it shows that the government is serious and it wants to understand what are the views of the industry and is also ready to positively respond to them.

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Over the weekend, the government had announced a slew of measures, including rollback of the higher tax on the super rich and foreign portfolio investors and domestic entrepreneurs, and exempted the start-ups from angel tax. That apart, it also unveiling a package to address distress in the auto sector and upfront infusion of Rs 70,000 crore to public sector banks.

“The first half is always a slack season and it got exacerbated by the slowdown. With the festive season coming up, I think these booster measures are very timely,” he added.

Published on August 27, 2019
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