Planning Commission to give nod for government capital infusion in SBI

KOLKATA: The central government's capital infusion to the tune of Rs 3,000-4,000 crore in SBI needs to be cleared by the Planning Commission, bank Chairman Pratip Chaudhuri said here today.

"The government has allocated Rs 3,000 crore to Rs 4,000 crore. There is a process. It has to go to the Planning Commission as it is an investment decision," he said.

The capital infusion will take place in March 2012, if not by December this year, he added.

Chaudhuri hinted that there could be delay as the government might decide on the total capital infusion of Rs 8,000-10,000 crore for several banks at the same time.

He said it was up to the government to decide on the options.

"The government shareholding will remain unchanged with rights issue at 59.4 per cent, if there is preferential issue then government shareholding will increase to around 65 per cent," Chaudhuri said.

If there is a QIP issue then government holding will be reduced.

"I cannot suggest what the government should do," Chaudhuri said.

According to him, even with Rs 3,000 crore infusion and profits the bank would comfortably reach tier-I adequacy level of 9 per cent.

The bank's credit is growing at 16-18 per cent now, but some sectors like aviation, power and textile were facing stress.

"Our guidance given by NIM for the year is 3.5 per cent, but we will surpass this."