Pranab to meet SBI board on August 6

Kolkata: Finance Minister Pranab Mukherjee will meet the board of State Bank of India in Mumbai on August 6, SBI Chairman Pratip Chaudhuri said on Thursday.

“The Finance Minister will interact with the SBI board on August 6,” Mr. Chaudhuri told reporters. The meet with the Finance Minister demonstrated the deep commitment that the government had shown toward the bank, Mr. Chaudhuri said.

The interaction with the Finance Minister assumes significance in view of the pending rights issue of SBI, which the government has to compulsorily subscribe to if it wishes to maintain its stake at the same level.

Mr. Chaudhuri indicated that after taking out Rs 7,500 crore from tier-I capital toward provisioning for pension and wage liabilities in the last quarter of FY’11, the bank’s capital adequacy ratio had reduced from 9 per cent to 7.7 per cent.

Mr. Chaudhuri said that the proposed rights issue would help in raising tier-I capital, while a portion of the company’s annual profits would also utilised. He said the bank’s capital requirement for the next three years would be Rs 47,000 crore, out of which Rs 20,000 crore would come from the rights issue and Rs 27,000 crore from annual profits at Rs 9,000 crore per annum.