SBI to raise Rs500 crore via bonds for Tier II capital

The State Bank of India (SBI) will raise Rs500 crore through public issue of bonds to augment its Tier-II capital. The bonds will have an option to retain 100 per cent oversubscription, SBI said in a filing with the Bombay Stock Exchange (BSE).

The executive committee of the central board of the bank has approved raising its Tier II capital by way of public issue of lower Tier-II bonds, SBI informed the BSE.

SBI, the nation's largest lender, is planning to bring down its non-performing assets from April-June level and has already introduced measures to reduce fresh slippages.

"I expect it to come down but won't give any percentage," bank's managing director S K Bhattacharyya said on Monday. The state-run bank had an NPA level of 1.7 per cent during April-June this year against last year's level of 1.55 per cent.

However, Bhattacharya said, the NPA levels are not significant considering the asset and business of the bank.
 
Meanwhile, SBI proposes to review its special home loan scheme by the end of this month. Any extension of the scheme would be based on the outcome of the asset-liability committee meeting scheduled for this month-end, Bhattacharya said.

The scheme launched under the `SBI My Home Campaign' in August last year to facilitate home buying during the festive season, was initially intended for a period of three months and was later extended due to the good response and surplus cash available with the bank.

The special home loan scheme is however, due to expire on 30 September.

Under the scheme, home loans were offered at eight per cent for the first year and 8.5 per cent fixed for the second and third year.