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SBI Faces Loan Crunch – Needs Rs. 15000 Crore Per Year To Match Loan Demands

State Bank of India, country’s leading bank operator is now in a difficult situation. SBI needs to raise funds of about $3 billion (Rs. 15000 Crore) to meet the loan demand. Apart from $1.6 billion (Close to Rs. 8000 crore) assured by the government, the bank needs to raise more funds.

State Bank Of India Logo

State Bank Of India Logo

Worsening economy is resulting in all such issues with banks needing to raise capital to strengthen balance sheets and the idea for issuing shares for public backfired with India facing some major problems in stock market. Official SBI source said that the government will pump resources of $1.6 billion by buying shares.

This investment will raise government’s stake for about 2-2.25% up from the current share of 59%; the bank needs $3 billion on the whole including the retained profit a year to meet certain loan demands. Also, SBI is pressurising government to invest more to reduce the deficit.

SBI is expecting a growth of 16% this fiscal year which ends in March when compared to a record of 21% last year. Such huge money needs to be invested by government to save the future of banks.

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