In what comes as a much-needed relief to capital-starved public sector banks, the Reserve Bank of India has allowed some items on the balance sheet, most notably, the revaluation reserves linked to their property holdings, to be included in the tier-I capital.

Speaking to Bloomberg TV India, State Bank of India’s Chief Financial Officer Anshula Kant says the RBI norms may increase the bank’s tier-I capital by 100 bps or more. SBI also has plans to divest 10 per cent in the life insurance joint venture and some other strategic assets that could fetch ₹2,000-3,000 crore, she said.

What really prompted RBI to relax Basel-III norms? Is it just a global alignment or is it a sign that Basel requirements are too daunting for the Indian banking space?

Actually, if you see the earlier guideline of the RBI, these are not strictly specified as per Basel-III. I think RBI has moved towards convergence of Basel-III guidelines.

So obviously, given the grim situation, it comes in handy than it would have in other times. I think it is a big positive for banks.

Will you look at putting more assets under revaluation at this point?

I’m not 100 per cent sure. As far as I recall, we got all our real estate assets valued at that time. We had not excluded any asset from that list.

The big question the market is asking is how much does it really put into your tier-I capital ratio? Can we safely assume over 100 basis points at this point?

I would imagine so — 100 bps or more — if you take the whole thing.

There is no timeline attached to when we will take the real estate evaluation because there are two external valuations on a large number of properties.

We will see how it goes.

If you could just run through capital ratios for FY16. What is being projected for FY17 as per the Basel-III norms?

Even at the end of FY17, given that we are a domestically systemically important bank (D-SIB), the Basel-III requirements or RBI requirements for tier-I is 8.55 per cent, which is still significantly below our current tier-I of 9.64 per cent. So, I think we are fairly comfortably placed.

Prior to this valuation, you had gone ahead and raised some funds — ₹3,000 crore and then ₹3,000 crore again. What is the fund raising plan for this quarter?

We did raise ₹4,000 crore in tier-II towards the end of December.

So far, this quarter, we have raised ₹3,000 crore, and we are expecting to raise another ₹3,000 crore before the month end. So that would be a total of ₹10,000 crore since December.

SBI Chairperson Arundhati Bhattacharya is also talking about asset monetisation and non-core asset sales essentially during FY17. So, what kind of funds are you hoping to get from there?

Our expectation is ₹2,000-3,000 crore next year.

We have a plan to divest 10 per cent from our life insurance joint venture; plus there are some other strategic assets which we are looking at. So it should be anywhere in between ₹2,000-3,000 crore.

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