Centre seems more details on SBI rights issue

State Bank of India on Wednesday said the Finance Ministry had asked for more details on its proposed Rs.20,000-crore rights issue.

"They (Finance Ministry) have come back to me and asked for some more information (on the proposed rights issue)," SBI Chairman O. P. Bhatt said on the sidelines of an event here.

Earlier this month, SBI Chief had met Financial Services Secretary R. Gopalan on its proposed Rs.20,000-crore rights issue.

As part of its resource raising plan, SBI this week filed the draft prospectus with market regulator SEBI for raising up to Rs.1,000 crore through the issue of bonds to retail investors.

SBI intends to deploy the proceeds to augment its capital base in line with its growth strategy.

This is the first time when bonds are being issued by a bank for retail investors wherein the minimum application amount is Rs.10,000.

However, the coupon rate and mode of interest payment would be decided later. Lower Tier II bonds would have maturity of 10 years, while the Upper Tier II bonds would have a tenor of 15 years. The bonds are not deposits of the bank and are not guaranteed or insured and they may not be used as collateral for any loan made by the bank or any of its subsidiaries or affiliates, SBI said.

Teaser loan scheme extended

Meanwhile, the bank said it would extend its 8 per cent concessional home loan scheme, popularly called teaser rates, by another three months till December.

The popular home loan and car loan schemes by SBI were due to expire on September 30.

Centre seems more details on SBI rights issue

By: Bhavana Jhingan

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