Soon after the Finance Ministry asked the banks for exploring options for raising funds, State Bank of India (SBI) today announced plans to set up a holding company for the purpose.
"It (setting up a holding company including all subsidiaries) is one of the possibilities (for raising capital)....Currently, there is no clear view on this," SBI Chairperson Arundhati Bhattacharya said here.
The proposal for setting up of a holding company with the government, she said, adding, it requires regulatory clearances.
Setting up of holding company would also require amendment to SBI Act, she added.
Earlier in the day, Financial Services Secretary G S Sandhu said various options like ESOPs, SPV model and holding company model were discussed in the meeting of Finance Minister P Chidambaram with heads of PSU banks by which banks could raise funds from market to meet their capital requirement.
Under the bank-wise holding company model suggestion, he said, the bank will transfer all its subsidiaries to the new company which in turn can tap market for funds.
"RBI has approved it (holding company model). We are waiting for Sebi's reply then we will go ahead," he said.
Sandhu said government can provide capital only up to a limited extent remaining funds have to be raised from the market.
"Beyond that (government capital infusion) we trying to enable them that they have to come up with options...RBI is also working on various options. So, we are very soon going to finalise some of these options to enable them to raise money from the market," he said.
