State Bank of India (SBI), the country's largest lender, today said it could raise Rs 28,000 crore from bonds to meet regulatory capital requirement and to fund business growth during the current fiscal.
"We have enough cushion. Around Rs 28,000 crore headroom is available for raising subordinated bonds as and when required," a top SBI official told PTI.
The bank aims to maintain capital adequacy ratio of 13 per cent in 2009-10, he said.
Besides, capital is required for funding balance sheet growth during the current fiscal, he added.
Last month, SBI Chairman O P Bhatt, while announcing the results, had said deposits and advances are likely to grow by 25 per cent each during the year.
The banking colossus SBI recorded an impressive 36 per cent net profit of Rs 9,121.2 crore in 2008-09, up from Rs 6,729.1 crore in the previous fiscal. The total income of SBI rose to Rs 76,479.2 crore compared with Rs 57,645.2 crore a year ago, up by 33 per cent.
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The official said, the bank could also raise equity through rights issue subject to government approval.
"SBI plans to raise Rs 20,000 crore in this financial year, preferably in the form of rights issue, and will submit a proposal regarding this to the new government at the centre," Bhatt had said last month.
Last year, SBI raised Rs 16,736.31 crore from rights issue, which was priced at Rs 1,590 a share. Existing shareholders got one share for every five shares held.
The shareholders got a share at a premium of Rs 1,580, for the face value of Rs 10. For the rights issue, the bank also decided to raise its issued capital to Rs 650 crore from the earlier Rs 526.30 crore.
Besides, the bank also raised Rs 542 crore through employees stock purchase scheme in 2008.
SBI is also planning to tap the rural market in a big way and aims to nearly double the number of such accounts to nine crore in two years. At present, it has about 5 crore deposit account holders in rural areas and one crore accounts on advances side.
This will help greatly in mobilising low cost deposits. Current account and saving accounts (CASA) at the end of March 2009 stood at 39 per cent.
The bank has 17,979 customer service points, banking correspondents and banking facilitators in place, he said, adding it plans to cover an additional 50,000 villages in the current year.
Besides, the bank has tied up with India post to collect deposits and disburse advances in the rural area.