Latest news with #BaselIII-compliant
Indian Express
6 days ago
- Business
- Indian Express
Nagaraju asks banks to raise capital, lend more
Banks need to further step up lending to meet the economy's demanding growth requirements, and should not hesitate to explore multiple avenues to raise the capital needed, financial services secretary M Nagaraju said on Friday. He assured all necessary policy support to the lenders, and hinted at relaxations in the foreign direct investment (FDI) rules. Speaking to Financial Express Deputy Managing Editor Shobhana Subramanian at the FE Modern BFSI Summit here, Nagaraju said: 'We also actually need to look at reviewing the current FDI rules in the banking sector to enable Indian banks to raise more capital…more patient capital.' The FDI in private banks is currently capped at 74 per cent, whereas the limit is 20 per cent for public sector banks (PSBs); any single entity cannot hold more than 15 per cent in any Indian bank unless exemption is granted by the Reserve Bank of India (RBI). 'If foreign capital comes at a cheaper rate, I think we should welcome (it). Currently, it is 15 per cent (single entity cap), and if it can be more, the banks will be able to expand credit, that's the goal,' the DFS secretary said. He stressed the need to have sustained high growth in credit flows to the needy sectors of the economy, including MSMEs. As of June 27, 2025, credit offtake was up 9.5 per cent on year, lagging deposit growth of 10.1 per cent. Nagaraju's comments come at a time when the State Bank of India (SBI) has raised Rs 25,000 crore through qualified institutional placements (QIPs) to bolster its capital base, and other state-run banks among themselves are set to raise Rs 20,000 crore via this route in the current financial year. 'Credit growth is a little slower in this quarter, but we are expecting that it will pick up… we also want the banks to lend,' the official said. With large corporations flush with cash, credit growth is now largely directed at MSMEs, the secretary said. In March 2025, the aggregate capital adequacy ratio (CAR) of 46 major banks reached a record high of 17.2 per cent, but the credit flows haven't been exactly keeping pace with this, or the investment demand to the assisted via bank capital. With banks required to play a pivotal role in driving India's ambition of becoming a $30-trillion economy by 2047, he said bank credit to the private non-financial sector should reach around 130 per cent of the gross domestic product (GDP) from 56 per cent now. According to Nagaraju, banks and financial institutions need to explore and expand various avenues of raising capital, including conventional equity markets, issuance of Basel III-compliant AT1 bonds and tier 2 instruments. They could also explore innovative methods like tapping global financial hubs, green bonds, sustainability-linked loans and also foreign debt markets to fund domestic credit expansion. He also urged large incumbent banks to focus on capital conservation by reducing operational costs with the use of technology. Nagaraju said banks ought to reimagine deposit mobilisation and increase leverage and productivity, deepen digital and data capabilities, and build future-readiness in terms of ESG-resilience and governance. By advancing these strategic themes, Indian banks could actually transform themselves into stronger institutions, he said. 'Therefore, access to capital from all sources needs to be looked at and worked upon by all of us. We need multiple globally competitive large banks facilitating access to global funds, best talent and technical expertise,' he said. Currently, only two Indian banks — SBI and HDFC — are in the top 100 global banks by total assets, which is not enough, he said, drawing comparison to lenders in China and the US. On further consolidation of PSBs, he said the previous mergers have yielded good results. 'We would see that wherever the synergies are, we can always look at them (more PSB mergers).' Banks anchor inclusive growth by bringing the unbanked under formal financial systems, enabling millions through schemes like Pradhan Mantri Jan Dhan Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, and more, he added.
Mint
21-07-2025
- Business
- Mint
SBI raises ₹25,000 cr via India's largest QIP; to issue 30.6 cr shares at ₹817 each
Mumbai: The country's largest lender State Bank of India has raised ₹ 25,000 crore through a qualified institutional placement (QIP) of its equity shares, making it the largest QIP executed in Indian capital markets. The board of the public sector bank announced the close of the QIP late Monday evening, and approved the issue and allotment of 30.6 crore shares at an issue price of ₹ 817 each. The QIP was subscribed 4.5 times, with 64.3% bids being made by foreign investors. Marquee long-term investors received around 88% of the final allocation, including 24% of the issue size getting placed with foreign long-term investors, the bank said in a release. 'This landmark equity raise is a vote of confidence in SBI's solid fundamentals, prudent risk management and digital-first growth agenda,' SBI Chairman C.S. Setty was quoted as saying in the release. The bank said it will use the proceeds from the share issue to augment its common equity tier-I (CET-1) capital buffer, which will improve to 11.50% from 10.81% as on March 31, 2025. This capital raise will support calibrated credit growth across retail, MSME and corporate segments, it added. Life Insurance Corp (LIC) of India had participated in SBI's QIP, acquiring 6.1 crore shares for ₹ 5,000 crore, the insurer informed the exchanges post market hours on Monday. LIC said it expects to receive the shares by 23 July and for them to be listed by 24 July. Post issue, the shareholding of the insurance company in SBI will rise to 9.49% of the paid-up capital of the bank from 9.21% earlier. The latest QIP is the first one for the bank since FY18, when it had raised ₹ 18,000 crore. The issue is part of SBI's mega fund-raising plan for FY26, Mint had reported on 16 July. Looking to beef up its capital ratios, the public sector bank is looking to tap both the debt and equity markets to raise up to ₹ 45,000 crore in FY26. SBI had announced its plan for a QIP in May, and the proposal was approved by its shareholders on 13 June. The issue opened for subscription on 16 July with a floor price of ₹ 811.05. Shares of the bank ended 0.2% higher today at ₹ 824.60 on the NSE. On the day of the launch of the QIP issue, SBI had also announced board approval to raise up to ₹ 20,000 crore through Basel III-compliant additional Tier-I (AT1) and Tier-II bonds, in one or more tranches. SBI was the largest issuer of bank bonds in FY25, raising a cumulative ₹ 27,500 crore. Of this, ₹ 5,000 crore through AT1 bonds and ₹ 22,500 crore through multiple tranches of tier-II bonds. With the estimated fundraising for FY26, the public sector lender is expected to be the largest bond issuer this year, as well, as per Mint's report. Against the regulatory requirement of 12.1%, SBI's capital adequacy ratio, or risk buffer, was 14.25% at the end of March, slightly lower than 14.28% a year ago. The bank still lags peers like HDFC Bank (19.6%) and Bank of Baroda (17.2%), which is the likely cause for the ongoing fund-raising drive. SBI's consolidated common equity Tier 1 ratio (CET1) improved to 11.1% as of March this year from 10.3% as of March 2022, Moody's India said in a note earlier on Monday, adding that the bank's plan to raise new equity capital and capital gains from the partial sale of its stake in YES Bank will help improve the CET1 ratio further, supporting its balance sheet buffers. The ratings agency said funding and liquidity will continue to be SBI's credit strengths, as the largest bank in India with 23% deposit market share, with most funding coming from retail deposits. In May 2025, SBI had announced that it plans to sell over 413 crore equity shares of YES Bank, or 13.19% stake, to Japan-based Sumitomo Mitsui Banking Corp. (SMBC) for ₹ 8,889 crore. SBI's strongest retail franchise amongst Indian banks, access to low-cost deposits, and sufficient holdings of liquid government securities support its funding and liquidity, Moody's said. The ratings agency upgraded SBI's Baseline Credit Assessment (BCA) and Adjusted BCA to 'baa3' from 'ba1', with a stable outlook on the ratings. 'The upgrade of the bank's BCA is driven by our expectation that the bank's internal capital generation, along with opportunistic external capital raise, will improve its capitalization over the next 12-18 months, bringing its standalone credit profile in line with the other similarly rated peers,' the note said, pegging the bank's loan growth at 12% for FY26, in line with the industry level growth.
Mint
17-07-2025
- Business
- Mint
SBI share price may be in focus today as the PSU bank launches ₹25k crore QIP; details here
State Bank of India (SBI) share price is likely to be in focus on Thursday, July 17, a day after the company announced the launch of a share sale to institutional investors to raise ₹ 25,000 crore. SBI share price ended 1.87 per cent higher at ₹ 831.70 apiece on Wednesday, extending gains to the fourth consecutive session. SBI's board on Wednesday, July 16, approved the launch of a qualified institutional placement (QIP) of fully paid-up equity shares of the company at a floor price of ₹ 811.05 per equity share, which is at a 2.3 per cent discount to the last closing price of ₹ 830.5 on the NSE. The issue opened on Wednesday, July 16. The bank may offer a maximum 5 per cent discount on the floor price calculated for the QIP. The bank will determine the issue price after consulting the book-running lead managers. SBI's central board on July 16 approved raising funds by the issue of Basel III-compliant additional tier-1 and tier-2 bonds, up to an amount of ₹ 20,000 crore to domestic investors during FY26. In May this year, SBI's board gave its nod to raise funds of about ₹ 25,000 crore in the current financial year (FY26) in one or more tranches through QIPs or a follow-on public offer (FPO) or any other permitted mode or a combination thereof. In recent times, the SBI share price has underperformed the market benchmark, gaining nearly 5 per cent this year so far compared to an over 6 per cent gain in the benchmark Nifty 50. Over the last year, the PSU bank stock has declined 7 per cent, hitting a 52-week low of ₹ 680 on 3 March this year. SBI share price hit a 52-week high of ₹ 899 on 19 July last year. However, on a monthly scale, the stock has been in the green since March. In July, it has climbed 1.4 per cent. Read all market-related news here
Mint
17-07-2025
- Business
- Mint
SBI share price may be in focus today as the PSU bank launches ₹25k crore QIP; details here
State Bank of India (SBI) share price is likely to be in focus on Thursday, July 17, a day after the company announced the launch of a share sale to institutional investors to raise ₹ 25,000 crore. SBI share price ended 1.87 per cent higher at ₹ 831.70 apiece on Wednesday, extending gains to the fourth consecutive session. SBI's board on Wednesday, July 16, approved the launch of a qualified institutional placement (QIP) of fully paid-up equity shares of the company at a floor price of ₹ 811.05 per equity share, which is at a 2.3 per cent discount to the last closing price of ₹ 830.5 on the NSE. The issue opened on Wednesday, July 16. The bank may offer a maximum 5 per cent discount on the floor price calculated for the QIP. The bank will determine the issue price after consulting the book-running lead managers. SBI's central board on July 16 approved raising funds by the issue of Basel III-compliant additional tier-1 and tier-2 bonds, up to an amount of ₹ 20,000 crore to domestic investors during FY26. In May this year, SBI's board gave its nod to raise funds of about ₹ 25,000 crore in the current financial year (FY26) in one or more tranches through QIPs or a follow-on public offer (FPO) or any other permitted mode or a combination thereof. In recent times, the SBI share price has underperformed the market benchmark, gaining nearly 5 per cent this year so far compared to an over 6 per cent gain in the benchmark Nifty 50. Over the last year, the PSU bank stock has declined 7 per cent, hitting a 52-week low of ₹ 680 on 3 March this year. SBI share price hit a 52-week high of ₹ 899 on 19 July last year. However, on a monthly scale, the stock has been in the green since March. In July, it has climbed 1.4 per cent. Read all market-related news here Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
Hans India
17-07-2025
- Business
- Hans India
SBI gets nod to raise Rs 20,000 cr via bonds
New Delhi: The board of directors of State Bank of India (SBI) on Wednesday approved a proposal to raise funds worth Rs20,000 crore through the issuance of bonds to domestic investors in the current financial year (FY26). In a regulatory filing, India's largest lender confirmed that its Central Board approved the raising of up to Rs20,000 crore during the current financial year through Basel III-compliant Additional Tier-1 and Tier-2 bonds. These bonds will be issued in Indian rupees to domestic investors, subject to government approvals where necessary. The move is aimed at strengthening the capital base of the country's largest the announcement of the fundraiser, SBI shares shot up over two per cent to touch an intra-day high of Rs834 on the National Stock Exchange (NSE). Earlier in May this year, SBI's board gave the go-ahead for raising equity capital of up to Rs25,000 crore during FY26. The capital will be raised in one or more tranches via Qualified Institutional Placement (QIP), Follow-On Public Offer (FPO), or other permissible methods. The objective is to boost SBI's Common Equity Tier 1 (CET1) capital ratio— which will bolster the bank's financial health. The proposed QIP will lead to a dilution of the government's stake, which stood at 57.43 per cent as of March 31, 2025. To manage the QIP process, SBI has appointed six prominent investment banks -- ICICI Securities Ltd, Kotak Investment Banking, Morgan Stanley, SBI Capital Markets Ltd, Citigroup, and HSBC Holdings Plc. SBI gave a dividend cheque of Rs8,076.84 crore to the government for the financial year 2024-25. The public sector bank's net profit for the financial year 2024-25 shot up to Rs 70,901 crore. The bank is celebrating its 70thyear of operations with a balance sheet that has soared to `66 lakh crore and the number of its customers surging past a staggering 52 crore. SBI also drives financial inclusion through more than 151 million Jan Dhan accounts and an extensive correspondent network. The bank's agricultural lending exceeded Rs3.5 lakh crore in FY25 -- the highest in the country -- supporting farm infrastructure, according to the statement. In FY25, the Bank reinforced its social impact footprint by investing Rs 610.8 crore in CSR initiatives, reaching 94 'Aspirational Districts'. Its efforts spanned healthcare, education, rural development, and environmental sustainability.
