Rights issue very imperative for SBI: Gopinath Natarajan, IIFL PReMIA

Gopinath Natarajan, EVP, IIFL PReMIA in an interview with ET Now talks about State Bank of India.

What to your mind is the fundamental bottom for State Bank of India?

One needs to look into the numbers, and asset deterioration is happening. Possibility of assets deterioration, which hooked the market yesterday together with other couple of things, is that with such a large pension provisioning of close to 8000 crore being adjusted from reserves means that capital adequacy is now at about 12% and has negatively impacted capital adequacy.

Tier 1 capital is about 7.7%. These all tend to a scenario where if SBI needs to grow at about 18% along with the system the rights issue becomes very imperative. One needs to see where the event called the rights issue goes. These are the things which will pan out in the next couple of weeks or couple of months for SBI to get some kind of a direction.