Govt will infuse Rs 6,000 cr before March end: SBI

The rights issue of State Bank of India, worth around Rs 6,000 crore, which is getting increasingly important for the bank to maintain its capital adequacy will happen before the financial year-end.

SBI chief financial officer, Diwakar Gupta confirmed the news this morning in an interview to CNBC TV18. He said that the government was always willing to infuse the funds but specific decisions were taken yesterday. It will be a preferential placement to the government and the infusion is expected to be around Rs 6000 crore.

Gupta said, “If the govt infuses Rs 6,000 crore, we don’t need anything else to raise the further capital of any kind to reach 8 percent of tier one capital adequacy on March 31.” And the issue would be completed before 31 March, Gupta confirmed.

When asked about a potential default from Kingfisher Airlines, and what the banks were thinking about it, Gupta said KFA is a large account holder in SBI and it is important for the economy. So it was in everybody’s interest to see that the account could perform. “For that lenders are taking a common view which is the best way forward,” he said.

He said the classification of the account is different for different people and was not necessarily a non performing asset for all banks. But Gupta also agreed that that promoters try to get equity but funds are not easily available given the nature of the business.

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