India’s largest bank State Bank of IndiaNSE -1.89 % said it has received its board’s permission to extend the deadline to raise Rs 20,000 crore till March next year. The bank may explore follow-on public offer or qualified institutional placement or rights issue for the same while it has raised Rs 1,251 crore in bonds on Friday to boost its additional tier-1 capital ratio.
The bonds SBI allotted to investors are in the nature of non-convertible and perpetual, and are Basel-lll compliant for inclusion in additional tier-1 capital, the bank said on Friday in a regulatory filing to the stock exchanges. The bonds carry a coupon of 9.45% payable annually with call option after five years.
SBI, as a systematically important bank, needs to comply with most stringent capital rules by April 1, Reserve Bank of India said on March 14. The banking regulator said that HDFC BankNSE -0.99 % and ICICI BankNSE -0.28 % are also in the category of banks which are too big to fail.
The additional common equity tier-1 (CET1) requirement for D-SIBs (domestic systematically important banks) has already been phased-in from April 1, 2016, and will become fully effective from April 1, 2019,” RBI said on March 14. The additional CET1requirement will be in addition to the capital conservation buffer.
Tier-1 capital is calculated as common equity Tier-1(CET1) capital plus additional Tier-1 capital (AT1).