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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (9671)	11/20/1999 10:23:00 AM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

State Bank of India to be privatized? Plans to raise $900 mil sbi.co.in SBI to privatise- 4000 crore to be raised. The State Bank of India will raise between Rs 3500 crore to Rs 4000 crore from the capital market in July or August next year bringing down the government holding to as low as 40 per cent and becoming a full-fledged private sector bank. Launching the SBI gold deposit scheme here, bank chairman G G Vaidya said he would need additional capital in any case -whether the reserve bank of India, the majority stakeholder, subscribes to its rights or not. While Mr. Vaidya did not indicate what RBI's response would be to the public issue, all indications from the government and banking sources suggest that the country's largest bank would be privatised within a year. Mr. Vaidya said he would formally approach RBI in December to ascertain the central bank's response to the SBI's proposal. The central bank has close to 60 per cent holding in SBI and parliament would need to change the state bank of India act before the bank is privatised. The act stipulates a mandatory government holding of not less than 55 per cent and maximum foreign holding of 20 per cent. Mr. Vaidya had said last week that he would seek the cap for foreign holding to go to 30 per cent. Mr. Vaidya said if required the SBI may offer the voluntary retirement scheme to the employees to cut the staff cost. The VRS would not necessarily depend on the privatisation move. 'We may do it before or after the privatisation, ' he said. The public issue could be in the form of a rights offer, American Depository Receipts or Global Depository Receipts. 'The final details will be worked out only after presentation of the balance sheet in March 2000, ' the bank chief said. The government has made its stand clear on the issue of capitalisation of banks. Most of the bank need to raise additional capital for meeting their RBI-stipulated capital adequacy ratio of nine per cent by march 2000. The funds, have to either come from the government-the owners or the capital market. Banking secretary Devi Dayal had clearly said recently that the government would amend various banking laws to ensure the privatisation. Source : MakroIndia Nov 20, 1999