State Bank of India (SBI), the country's largest lender, today expressed hope it would get capital infusion of Rs 3,000-Rs 4,000 crore from the government this fiscal.
"It [infusion] is round the corner. It could happen any day now. I think [the mode] is not decided, but whatever we are getting we will be getting in cash. We are expecting Rs 3,000-4,000 crore either in December or by March," SBI Chairman Pratip Chaudhuri said.
Talking to reporters on the sidelines of Delhi Economics Conclave, he said that "if they [government] put in Rs 3,000 crore [in SBI], so this will mean another 3% increase in government holding". Currently, the government of India holds 59.4% in the bank.
The government has earmarked Rs 6,000 crore for the fiscal for capital infusion in public sector banks to ensure that they meet the regulatory requirements. In 2010-11, the government had provided capital support to the tune of Rs 20,157 crore to public sector banks.
The Centre is committed to providing adequate capital to public sector banks so as to maintain their Tier-I capital at 8%.
When asked if RBI will cut interest rates in its Friday monetary policy review, the SBI chief said, "I don't think so because food inflation has come down significantly and steadily. RBI has said 7% is the level they are targeting".
Food inflation has started easing over the past few weeks and declined to 6.6% in the week ended November 26.
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On the bank's liquidity condition, Chaudhuri said it was "all right,...[but] systemic liquidity I believe is little tight".
However, he does not expect RBI to slash the Cash Reserve Ratio (CRR) as it would be contradictory to the monetary stance of targeting inflation.
Chaudhuri further said that SBI has revised its Net Interest Margin (NIM) upward for the current fiscal.
"I am encouraged to revise the (NIM) guidance upward. We had given a guidance of 3.5% at the start of the year...Now I am inclined to revise it upwards to 3.7-3.75 % on aggregate basis," the SBI chief said.
He also said that non-performing assets of the bank stood at 2.04% of the total advances and "we would like to continue at that".