International BusinessSBI to raise Rs 20,000 crore through equity in 2 years
Has capital requirement of Rs 50,000 cr over the next five years.
- Undisbursed loans may lead to rate war, even if RBI tightens - Excess liquidity a matter of concern: SBI - Lessons to learn from markets - Bank stocks surge despite CRR rise - O P Bhatt supports RBI"s CRR hike - Govt banks struggle, but private banks"credit growth picks up
The country"s largest lender, State Bank of India (SBI), on Sunday said it had a capital requirement of Rs 50,000 crore over the next five years.
“We expect half this amount will come from internal accruals, while the rest will have to be raised. Around Rs 15-20,000 crore would be raised through the equity route in the next two years," SBI Chairman O P Bhatt said here.
He added that the bank was currently sitting on excess liquidity of Rs 75,000 crore, as on December 31. "This is exerting pressure on our margins but will continue for the next two quarters," Bhatt said.
In the next two quarters, SBI expects to shed bulk deposits of Rs 15-20,000 crore.
Bhatt was accompanying Union Finance Minister Pranab Mukherjee to the latter"s home constituency to inaugurate the bank"s entry into the final un-banked village there, in its campaign to bring financial services to 100,000 such un-serviced settlements. Mukherjee also inaugurated state-owned Union Bank"s sixth branch in Murshidabad district.
Bhatt said SBI was waiting for the government and other regulatory authorities to give their consent before going through with its merger with State Bank of Indore.
He was hopeful it would happen within this financial year.
“We have given our recommendations to the government, including the scheme of merger, share swap ratio and so on. This will be a technical merger, as we already own 98 per cent in the State Bank of Indore. We will complete the merger within a week, once the nod comes," he explained.
It will be SBI"s second merger with its originally seven associated banks, of which the State Bank of Saurashtra was fused with the parent bank last year.