SBI plans to monetise non-core assets, list subsidiaries in stock market

State Bank of India (SBI) is planning to monetise its non-core assets and list some of its subsidiaries in the stock market for raising funds to meet Basel III risk norms, which will come into effect from March 2019.

SBI chairperson Arundhati Bhattacharya said on Tuesday, "Public sector banks need Rs 1.80 lakh crore to meet Basel III norms while the government will provide only Rs 70,000 crore. The rest will have to be borne by banks through profits and non-core assets. For instance, for us, we have a number of non-core assets which we are looking at monetising. We also have very successful subsidiaries which we have not listed. So, we can look at those as well."

At an Associated Chambers of Commerce and Industry of India event here, Bhattacharya said that banks are examining various ways through which they can raise the capital. "One thing I would like you to be assured about is that there is a lot of thought going into it and banks will be capitalised enough in order to have good capital to support the economy."

SBI has already announced plans to lower its stake in SBI Life Insurance and SBI General. In its life insurance venture, SBI proposes to sell up to 10 per cent stake while it may be about 23 per cent in case of its general insurance company.

At the same time, Bhattacharya emphasised that meeting Basel III requirements is going to be a challenge.

"It is a challenge because India is basically capital starved. On top of that, you need capital to grow. And to compound all of this, you (have) regulatory requirements on keeping capital at higher level than Basel," she said.