Finance Minister Pranab Mukherjee will meet the board of State Bank of India (SBI) in Mumbai on August 6, SBI Chairman Pratip Chaudhuri said on Thursday.
SBI's Rs 20,000-cr rights issue this year
"The finance minister will interact with SBI board on August 6," Chaudhuri told reporters on the sidelines of the Ficci Banking Conclave.
The meet with the finance minister demonstrated the deep commitment that the government had shown toward the bank, Chaudhuri said.
The interaction 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.
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 FY11, the bank's capital adequacy ratio had reduced from 9 per cent to 7.7 per cent.
Chaudhuri said that 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.
Chaudhuri said the size of the rights issue would not be reduced.