State Bank of India Expects New Plan

State Bank of India Expects New PlanState Bank of India is the Country’s largest bank, and it is hoping to move a new proposal for the bank’s rights of a smaller amount than Rs 20,000 crore that was proposed earlier because the government is currently experiencing a fiscal constraint. Right now, the government holds a 59% stake in the bank and will then pick up the amount that is offered.

However, a finance ministry official stated that he is ready to consider a smaller offer. The State Bank of India is hoping to avoid any expenditure that are not necessary in order to avoid a much higher burden than initially budgeted and foreseen drop in revenues.

The ministry officials have proposed an Rs 20,000 crore rights issued by half. “There are various options. We can also consider the issue in two tranches. Le the bank submits its proposal first”. The State Bank of India is seeking to grow financial credit by 19% in 2011-2012, and it also plans to raise $5 billion through offshore loans by December.

State Bank of India Chairman, Pratip Chaudhuri state that the debt would be raised during the second and third quarter of the fiscal year. “We will be raising the funds, but there has to be visibility of credit growth. If there is demand for assets, we will go and raise it”.