The State Bank of India confirmed reports that it had received Rs3,004 crore from the government as part of the plan to recapitalize state run financial institutions. The shareholdings of the government after this new infusion would rise from 61.58% to 62.31%.
The infusion was done through subscriptions to preferential allotments of equity shares totaling 1.29 crore issued at Rs2,312.78 per share.
In a statement, SBI said, "We are confident that with this capital infusion, we will meet the capital adequacy requirements prescribed by (the) Reserve Bank." In an earlier communiqué, current SBI Chairman Pratip Chaudhur said that SBI would most likely achieve Tier 1 capital of about ten percent by the end of the 2013 fiscal year after capital infusion from the government as well as its profit accruals.
The government is planning to put in nearly Rs14,000 crore in state run financial institutions in order to boost core capitalizations as the country's financial system is gearing for compliance with Basel-III mandated guidelines on bank capitalization.
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