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Rs 50-100 crore next financial year.
According to O P Bhatt, chairman of the bank, the retail issue will be like just another product that will be offered to the public at the bank’s branches.
The bank plans to raise the money through 10-year bonds in the next financial year. “We will look at raising Rs 50-100 crore to start with and will plan the next issue based on the experience,” Bhatt said on the sidelines of a Confederation of Indian Industry conference on conscious capital in Mumbai
The coupon on the bond, says Bhatt, will be market determined. The money is expected to help SBI strengthen its tier II capital base.
According to Bhatt, the merger of State Bank of Indore, the subsidiary of the bank, will be merged earliest by April-May this year. The bank has got an in-principle approval from the Reserve Bank of India and has moved the finance ministry for further approvals. “There are procedures involved and it will take couple of weeks to get the ministry’s clearance,” Bhatt said. According to him, the bank will have to also obtain a clearance from the Securities and Exchange Board of India.
The bank does not need to immediately raise money because it is sitting on Rs 50,000 crore of surplus liquidity, Bhatt said.
With the credit offtake being muted throughout the year, the bank has been betting big on retail loan offtake through the special interest rates schemes it offered. According to Bhatt, the bank has been sanctioning close to Rs 2,500 crore a month under the special home loan scheme of 8 per cent interest rate.
In a rising interest rate environment, whether the bank will continue with its scheme beyond March 31, Bhatt said the lender will take a call on it by the end of this month.
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