SBI rights offer: Govt okays spl securities issue

The government on Thursday approved issuing special marketable securities worth Rs 9,995.99 crore to subscribe to State Bank of India’s (SBI) rights offer. The Cabinet, which met here on Thursday, gave its approval to modify an earlier decision to give SLR (statutory liquidity ratio) status to government securities.

The issuance of such securities would have allowed SBI to meet a part of its SLR requirement. Under SLR provisions, banks have to park 25 per cent of their deposits in government bonds. “The government is likely to receive around Rs 1,449 crore additionally by way of dividend and taxes from the bank during

2008-09 against an expenditure of Rs 825 crore as interest to be paid to the bank for the proposed securities,” an official statement said.

SBI has decided to raise Rs 16,736.31 crore by issuing about 10.5 crore shares on a rights basis. The issue, which opened on February 18 will close on March 18. The government had earlier decided to invest about Rs 10,000 crore in SBI to maintain its stake of 59.7 per cent.