State Bank of India has approached the finance ministry for floating a rights issue to meet core capital requirements in the coming years, its MD T S Bhattacharya said on Monday.
Bhattacharya told reporters that since government holding would not be allowed to go down below 51 per cent, the other option was to float a rights issue for which the government has to subscribe to.
While government holding in the bank was 59.73 per cent, the balance was free floating.
However, he said the bank would be able to meet Tier I capital requirement till 2008 by way of ploughing back profits.
The bank would raise Tier II and foreign currency bonds to meet additional capital requirements, Bhattacharya said, adding that SBI was targeting 25 per cent asset growth in the next few years.
At the banking conclave organised by the Federation of Indian Chambers of Commerce and Industry in Kolkata, he said there was no immediate need to merge the seven associates of SBI with the main bank.
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