SBI gets board approval to raise up to Rs 14,000 crore through bonds

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The State Bank of India (SBI) on Monday said it has got its board’s approval to raise additional tier-I capital of up to Rs 14,000 crore through Basel-III bonds.

The capital would be raised in Indian or US currency through a public offer or private placement to overseas and/ or lndian investors during financial year 2021-22.

“The Central Board of the bank at its meeting held today on 21.06.2021 inter alia accorded approval for raising capital by way of issuance of Basel lll compliant debt instrument in USD and/ or INR during FY22,” the bank said in a regulatory filing.

The country’s largest lender plans to raise fresh additional tier-I capital up to an amount of Rs 14,000 crore subject to the concurrence of Government of India.

Tier-1 capital refers to a bank’s core capital. It includes disclosed reserves that are present on a bank’s financial statements and equity capital. A lender uses tier-I capital to function on a regular basis and it forms the basis of a financial institution’s strength.

To comply with Basel-III capital regulations, banks globally need to improve and strengthen their capital planning processes. These norms are being implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks.

Shares of State Bank of India on Monday closed 1.64 per cent higher at Rs 419.55 on the BSE.

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