SBI Raises Rs 5,681 Crore By Issuing Preference Shares To Government

New Delhi:  State Bank of India (SBI) today raised Rs 5,680.99 crore by issuing preferential shares to the government.

The Committee of Directors for Capital Raising of SBI accorded approval to allot 21.07 crore equity shares on preferential basis to the Government of India, the bank said in a regulatory filing to stock exchanges. Shares were issued at a price of Rs 269.59 per unit of face value of Re 1 each, including a premium of Rs 268.59 per unit for a total consideration of Rs 5,680.99 crore.

The fund infusion is part of total capital support of Rs 7,575 crore to SBI fixed for the current fiscal.

Yesterday, the Finance Ministry asked the country's largest lender to initiate regulatory process to receive the remaining 25 per cent, or Rs 1,894 crore, capital support. The government is expected to provide the remaining amount to the bank by March 31.

The government, in July last, had announced a total capital infusion of Rs 22,915 crore to 13 PSU banks, including SBI, PNB and IOB, in this fiscal to enhance their lending operations.

The Finance Ministry had allotted 75 per cent of the amount initially while the rest was withheld.

"Consequent upon the above exercise, 75 per cent of the amount collected for each bank is being released now to provide liquidity support for lending operations as also to  enable banks to raise funds from the market," Finance Ministry had said in a statement then.

The remaining amount, to be released later is linked to performance, with particular reference to greater efficiency, growth of both credit and deposits and reduction in the cost of operations, it had said. The funds raised by SBI will help meet global risk norms under Basel III.

As of quarter ended December 31, 2016, the equity held by the government in SBI was at 61.1 per cent. Shares of SBI closed 2.83 per cent lower at Rs 251 on BSE today.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)