Discussions would probably start around May and by the end of the first quarter, they (SBI) would have a clear idea of how much capital to be raised initially. Like last year, they will come out with all three types – AT-1 bonds, infrastructure bonds and tier-2 bonds,” one of the people said. “The issuances will be healthy, based on the initial assessments of credit growth and demand.”
Latest Reserve Bank of India data showed that as on April 7, bank credit growth was 15.7% year-on, far higher than deposit growth of 10.2%. The wide gap between loan growth and deposit growth last year has prompted banks to turn to debt capital markets to raise funds and finance the credit demand.
Earlier this month, SBI’s board approved the raising of $2 billion through securities denominated in US dollars or any other convertible currency during the current financial year.
In the previous financial year, SBI had issued domestic debt worth close to ₹40,000 crore, spread across AT-1 bonds, infrastructure bonds and tier-2 bonds.
The bank had kicked off its bond issuance with the sale of AT-1 bonds worth ₹6,872 crore on September 7. Within the overall bond issuances, SBI had issued ₹19,718 crore of infrastructure bonds in two tranches.
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