SBI’s Rs 20,000 crore fundraise: Board to meet later this week for timeline extension; key things to know

With an aim to consider extension of timeline for raising funds, State Bank of India (SBI) on Monday said that the central board will meet later this week to consider extension of approval accorded by it for raising equity capital of up to Rs 20,000 crore from the market till end of FY20.

“A meeting of the central board of the bank is scheduled to be held on March 22, 2019 to consider inter alia the extension of approval accorded by central board for raising equity capital of up to Rs 20,000 crore from the market till March 31, 2020,” SBI said in an exchange filing.

It was in December 2018, the SBI shareholders tendered their approval to the fundraise plans of worth Rs 20,000 crore. The modes of raising funds include a follow on public offer (FPO).

Meanwhile, in a first-of-its-kind move that will ensure faster monetary transmission, SBI, which controls nearly a quarter of the banking system, announced linking of its savings deposits rates and short-term loans to the RBI’s repo rate.

The new rates linked the external benchmark rate of the repo rate, will be effective May 1. “To address the concern of rigidities in the balance sheet structure and address the issue of quick transmission of changes in the RBI policy rates, effective May 1, 2019, we’ve taken the lead in linking key pricing decision for savings bank deposits and short-term loans to the repo rate of the RBI,” SBI said.

Shares of SBI were trading 0.82 per cent lower at Rs 292.25 apiece on BSE.

State Bank of India