SBI to raise Rs 20,000 crore to fund “growth needs”

State Bank of IndiaAccording to a recent statement by the State Bank of India Chairman O P Bhatt, the bank might turn to a rights issue for the purpose of raising Rs 20,000 crore for funding its "growth needs" - it is already looking at a 25 percent increase in credit and deposits in 2009-10.

In January this year, the bank had raised nearly Rs 5,000 crore through tier II bonds.

Bhatt spoke about the move presently under consideration by the SBI on the sidelines of the Friday function marking the release of the book "The Evolution of State Bank of India, Vol 4, 1955-1980" by West Bengal Governor Gopalkrishna Gandhi.

Updating the reporters about the bank's intended raising of extra capital, Bhatt said: "We need capital for growth, and there are many ways for raising it. We have various options of raising capital such as such as follow-on-offer, rights issue or preferential issue. Our preferred option will be the rights issue."

Bhatt said that the SBI would need a raising of funds between Rs 60,000-70,000 crore to cater to the planned expansion during the next five-year period. He further added that the bank is waiting for the approval of the Union Government - which currently holds a 59.41 percent stake in the bank - for the proposed Rs 20,000 crore raising.