Government approves Rs 3,004 crore capital infusion for SBI

The government has approved fund
infusion of Rs 3,004 crore in SBI during
the current fiscal year to boost the bank's
capital base.
This is a part of the capital infusion plan
for the public sector banks for 2012-13,
sources said.
The Finance Ministry has recently
approved allocation of Rs 12,000 crore for
various public sector banks including SBI,
sources added.
The fund transfer to various banks would
be made in due course of time after they
obtain necessary approvals. Decision
about the remaining Rs 3,000 crore would
be taken soon, sources said.
The government has made a Budgetary
provision of Rs 15,000 crore for
recapitalisation of public sector banks in
the current fiscal year.
Last fiscal, the government had infused Rs
7,900 crore in SBI to increase the Tier-I
capital of the country's largest bank.
Following the capital infusion in March
2012, the government holding in SBI rose
to 61.58 per cent from 59.4 per cent.
SBI had raised over Rs 16,000 crore
through a rights issue in 2008. In its
rights issue, the government's
contribution was in the form of bonds
instead of cash.
The government has been infusing funds
in the public sector banks in the last
couple of years to strengthen their
finances.
It has injected about Rs 32,000 crore so
far in the previous two financial years.
During 2011-12, public sector banks got
Rs 12,000 crore for improving their capital
adequacy ratio. The government pumped
in Rs 20,157 crore in public sector banks
in 2010-11 to maintain tier I capital at 8
per cent and increase government's
equity in some banks to 58 per cent.