State Bank of India (SBI) may not raise fresh capital to fund growth in the current financial year, but to meet the long term capital requirement, was vetting options like listing of subsidiaries, leveraging real estate and government infusion of funds, said Arundhati Bhattacharya, Chairman, SBI.
The bank might look at listing its subsidiaries in the life insurance and cards segments, she said on the sidelines of an interactive session at the Indian Chamber of Commerce here today.
The banking sector would need capital to the extent of Rs 4.6 lakh crore by 2019 to meet Basel III and IFRS (International Financial Reporting Standards) norms, she said.
“ We are looking at options like listing some of our subsidiaries, leveraging various assets and fund infusion from government. Among the subsidiaries we are looking to list are the life insurance subsidiary (SBI Life Insurance Co) and the cards business (SBI Cards) ,” Bhattacharya added.
Basel III accords deals with global regulatory standard and aspects like bank capital adequacy, stress testing and market liquidity risk.
SBI was expecting a credit and deposit growth by 14% this financial year, said Bhattacharya.
“We are seeing a pick-up in credit in sectors like renewable energy, road infrastructure and mining. We expect a pick-up in other sectors like railways, defense, transmission and ports in the coming months,” she said. Recently, there were reports that SBI has put on hold $1-1.5 billion overseas bond issue. However, according to Bhattacharya, the bank had no such plans.
On the impact of the seventh pay commission for the central government employees, Bhattacharya said she expects it to be credit positive for banks and may also result in higher demand for housing loans, she said. The seventh pay commission has recommended 23.55% increase in pay and allowances of central government employees.