Government prepares to sell 8.4 per cent stake in SBI
05 Dec 2009
The union cabinet on Friday cleared the State Bank of India (amendment) bill for introduction in the current session of Parliament. The bill seeks to bring the government's holding in the country's largest bank on a par with other public sector banks at 51 per cent.
As on 30 September 2009, the government holds a 59.4 per cent stake in the SBI. Under the current rules, the stake of the promoter, that is the government of India, cannot fall below 55 per cent.
The decision will allow the government to sell 8.4 per cent stake in SBI, or around 53.31 million shares. At today's market value, the centre can raise Rs12,549 crore through this sale. Insurance companies own a 11.23 per cent stake in the bank, while the foreign institutional investor as on 30 at September stands at 9.87 per cent.
''We now have a headroom to raise Rs 12,000 crore,'' SBI chief financial officer.
S S Ranjan told newspersons in Mumbai. The capital infusion can either happen through a rights issue or by way of other financial instruments, he added.
The Reserve Bank of India earlier had a majority stake in SBI. This was subsequently transferred to the government.
SBI, which controls a fifth of the country's banking system in terms of assets, will need Rs36,000 crore over the next five years to maintain a capital adequacy ratio of 12 per cent. Last year, SBI had raised Rs16,700 crore through a rights issue.
.webp)
