Mumbai: The country's largest lender State Bank of India on Friday said that it has raised Rs 1,251.30 crore in bonds to boost its additional Tier 1 capital ratio. The unsecured bonds allotted to investors are non-convertible, taxable, perpetual and are Basel lll-compliant for inclusion in additional Tier 1 capital. The bonds carry a coupon of 9.45 per cent payable annually with call option after five years.
In a separate regulatory filing, SBI said that its board has extended the deadline to raise equity capital of up to Rs 20,000 crore from the market by way of follow on public offer/qualified institutional placement/preferential allotment/ rights issue/ any other mode or a combination of these till March 31, 2020.
"The Committee of Directors for Capital Raising at its meeting held today on 22 March 2019 deliberated and accorded approval to allot 12,513 non-convertible, taxable, perpetual, subordinated, unsecured Basel lll-compliant additional Tier-I bonds, for inclusion in additional tier-I capital of the bank...aggregating to Rs 1,251.30 crore," SBI said in a notice to the stock exchanges.
The bonds were subscribed on Friday, the bank added.
Anil Gupta, Sector Head-Financial Sector Ratings at ICRA said, "With strong credit growth and limited capital infusion from the government in the current financial year, SBI has raised additional Tier I capital to support its Tier I capital ratios. The regulatory requirement for Tier I capital will also increase in FY20 from 8.875 to 9.5 per cent and additionally with SBI being a systematically important bank it will need to maintain additional capital of 0.6 per cent over and above the regulatory capital requirement for other banks."