SBI public offer this fiscal; to tighten credit flow

SBI public offer this fiscal; to tighten credit flow
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First Published: Thu, Apr 19 2007. 03 01 PM IST
Updated: Thu, Apr 19 2007. 03 01 PM IST
PTI
New Delhi: State Bank of India (SBI), the country’s biggest lender, will come out with a follow-on public offer this fiscal to raise funds. “Some time this fiscal,”O P Bhat, SBI chairman said when asked about the timing of the public offer.
The bank had earlier said it was planning to offload about 5% of promoter’s stake to raise its capital adequacy ratio (CAR). Currently, RBI holds 59.73% stake in SBI, which the government intends to purchase toward the close of June.
SBI is also planning to curtail its credit growth by about 3% this fiscal following directions from the Finance Ministry given at a meeting on 19 April. “We are looking at 25% credit growth this financial year against 28% last fiscal,” he said.
At a meeting with PSU bankers on 19 April, finance minister P Chidambaram said credit growth of 30% in the industry have to be moderated. He asked bankers to slow credit to high risk sectors like commercial real estate, capital markets and systemically important NBFCs.
Bhat said credit growth in the industry is moving down. “I am sure we will have more moderation this fiscal.” He said hardening interest rate cycle in the system has either peaked or nearly peaked. About liquidity tightening by RBI, he said there was enough liquidity in the system.
After RBI hiked short term lending rate (repo rate) and cash reserve ratio, a requirement for banks to keep deposit with the central bank, many banks, including SBI, hiked their lending rates.
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First Published: Thu, Apr 19 2007. 03 01 PM IST
More Topics: Money Matters | IPOs |