Rights Issue | Banks India 2013
- State Bank of India said that Union Finance Ministry has assured that the bank would be adequately capitalized by March 2012, however, the route to re-capitalise it has not been decided yet.
- Whether it would be a rights issue, preferential or QIP route is still not decided.
- The Government is the largest shareholder of the bank with 59.4% holding.
- Chaudhari said that the government has to take a call on what level of ownership it wants to maintain in the bank. If it wants to have 59.4% stake in SBI, then it would be a rights issue. If it is to be raised from the level of 59.4%, then it would be a preferential issue, if it has to be lowered, then it has to be through a QIP issue.
- The SBI had reported a Tier-I capital adequacy ratio of 7.60% as of June 2011, against the suggested level of 8%. It is said that such a low Tier-I capital ratio provides an insufficient cushion to support growth and to absorb potentially higher credit costs arising from deteriorating asset quality.