SBI to raise Rs 18K cr

Started by sajiv, Dec 18, 2008, 04:58 AM

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Mumbai: Undeterred by the economic downturn and the turmoil in the global financial sector, State Bank of India, India's largest lender, has decided to raise Rs 18,000 crore from bonds by March 2010 in order to meet its capital requirement and fuel business growth.

"The bank is planning to raise unsecured and rated rupee innovative perpetual debt instruments, upper tier or lower tier II subordinated debt during the remaining part of 2008-09 and 2009-10," SBI said in a filing to the Bombay Stock Exchange.

The fund not exceeding Rs 18,000 crore would be raised in tranches with a minimum maturity of over 60 months as per the RBI guidelines through structured deals or by private placement, it said. The money raised from bonds could take the capital adequacy ratio under Basel II well above 14 per cent. As of September, the CAR of the bank as per Basel I norms was 12.14 per cent while as per Basel II norms it stood at 11.51 per cent.

Other banks are also raising money. Corporation Bank has proposed to raise Rs 300 crore through an issue of upper tier II bonds.