Bombay:
The State Bank of India has approved raising an additional 100 billion rupees ($1.21 billion) through infrastructure bonds this quarter to fund credit growth, an official from the country’s largest lender said today.
The executive committee of the bank’s central council, at a meeting held earlier today, approved fundraising through a public offering or private placement during this fiscal year.
In the first tranche, the country’s largest lender raised 100 billion rupees in December through 10-year infrastructure bonds at an annual coupon of 7.51%.
The money will come in handy for credit growth, and the bank would not be required to maintain a legal liquidity ratio or cash reserve ratio for funds raised through such bond issues, said the official, who asked for anonymity because he is not allowed to speak to the media.
“The funds raised through these banknotes will also help meet the targets for lending to the priority sector,” the official said.
In November last year, SBI chairman Dinesh Kumar Khara had said that the lender expects credit growth of 14%-16% for the current fiscal year. The bank has a term loan pipeline of rupees 2.4 trillion as it sees demand coming in from sectors such as infrastructure, renewables and services.
In addition to the December fundraising, the lender also raised rupees 68.72 billion through Basel III-compliant additional Tier I perpetual bonds and rupees 40 billion through 15-year Tier II bonds at a coupon of 7.57% in September.
(Except for the headline, this story has not been edited by DailyExpertNews staff and is being published from a syndicated feed.)
Featured video of the day
India’s economy grows 6.3% in September