An official from finance ministry said that the government has planned to make an amendment in the law regarding its stake in India largest lender, State Bank of India (SBI), thereby enabling the bank to raise funds.
Currently the government is required to hold a minimum of 55 percent stake in the bank. It holds 59.4 percent in SBI, greater than what it is required to hold.
The official said that the government plans to introduce legislation in both the houses of parliament and obtain approval from the law makers when they reconvene on November 19 for the winter session.
SS Ranjan, Chief Financial Officer, said that SBI would need Rs. 36,000 over next five years to maintain its Capital adequacy ratio of 12 percent. The bank raised Rs.16,700 crore through its first share sale in more than ten years in March 2008.
SBI posted a 10 percent hike in net interest income in the July-September quarter. This is attributed to income from bonds and currency trading.
Treasury profits of the bank also increased 236% from Rs. 162 crore to Rs. 545 crore, while gains from core fee income comprising commissions and brokerages rose 58 percent to Rs 2103 crore from Rs. 1331 the previous year.