GOI To Infuse Capital To The Extent Of Rs 7,900 Crore In SBI (31-Jan-2012)
The Government of India (GOI) has decided to infuse capital in the State Bank of India (SBI) to improve its creditworthiness and lend more. The government vide its letter dated January 30, 2012, to the SBI has conveyed its approval under section 5(2) of the State Bank of India Act to increase the issued capital by SBI by way of preferential allotment of equity shares to GOI to the extent of approximately Rs 7,900 crore including premium.
The capital infusion will improve CAR to beyond 9% and the government's stake in the bank, which is around 59.4% would rise to around 62%.The advantage of an increase in government stake is that the bank will have headroom to issue equity to private investors without fear of government stake falling below mandatory levels.
SBI is premier banking institution with 206 years of banking experience. It is India's largest commercial bank in terms of assets, deposits, profits and number of branches and employees. The bank has 13,686 branches across the country, while the SBI group has 18,506 branches.
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