SBI plans raising $4.3bln through rights issue

Amount will be added to lender's target of $10.8bln to satisfy India's growing loans demand.

State Bank of India (SBI), India's largest lender, plans to raise up to $4.3 billion through a rights equity issue in 2010/11, about half the amount it needs to sustain growth over the next five years, its chairman said.

O.P. Bhatt said on Wednesday the bank would need to raise 400 billion rupees ($8.6 billion) to 500 billion ($10.8 billion) to feed demand for loans over five years in the fast-growing economy.

"If we can raise half of it anytime during the next 12-18 months, it will be great," he told reporters on the sidelines of a banking technology summit.

The 100 billion ($2.16 billion) to 200 billion rupees ($4.3 billion) rights offering will need the support of the government, which owns about 60 percent of the bank.

"Our rights issue can be successful only if government subscribes to it," Bhatt said, adding the bank will start working with the government after the national budget on Friday that is expected to provide clarity on capitalisation plan for state-run banks.

View the full story in Reuters.