Five associate banks of State Bank of India to raise Rs 33,000 cr capital in next 5 yrs

Five associates of State Bank of India (SBI) would raise about Rs 33,000 crore capital to meet Basel III capital adequacy framework in the next five years between 2014-15 and 2018-19. In order to maintain existing shareholding, SBI would have to subscribe rights issue proportionately. However, in case of preferential allotment, the fund would flow from SBI.

State Bank of India has now five associate banks - State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. SBI first merged its associate State Bank of Saurashtra with itself in 2008. Two years later in 2010, State Bank of Indore was merged with SBI.



State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore will raise part of the fund by the market while remaining would be provided by State Bank of India. However, the unlisted subsidiaries State Bank of Patiala and State Bank of Hyderabad would get funds directly from SBI.

Two banks have already finalized their rights issues. State Bank of Mysore (SBM) plans to raise Rs 425 crore, while State Bank of Travancore has rights issue for up to Rs 485 crore.