State Bank of India (SBI), the country’s largest lender, is looking to raise up to $2 billion in the fiscal year 2024 through the sale of overseas bonds. This move comes as part of the bank’s efforts to strengthen its capital base and expand its business operations.
The sale of overseas bonds is a common method used by banks to raise funds from international markets. SBI has been actively raising funds through this method in the past, with its last overseas bond sale being in February 2021 when it raised $600 million.
According to SBI Chairman Dinesh Khara, the bank is looking to tap into the international market once again to raise funds for its business expansion plans. He stated that the bank is “keeping all options open” and will decide on the timing and size of the bond sale based on market conditions.
The decision to raise funds through the sale of overseas bonds comes at a time when the Indian economy is recovering from the impact of the COVID-19 pandemic. The pandemic has had a significant impact on the Indian banking sector, with banks struggling to deal with the rise in bad loans and declining profits.
SBI, like other banks in the country, has been affected by the pandemic. However, the bank has been able to weather the storm due to its strong fundamentals and focus on digital banking services. The bank has also taken measures to reduce its non-performing assets (NPAs) and improve its profitability.
The funds raised through the sale of overseas bonds will be used by SBI to support its business expansion plans. The bank has been looking to expand its operations in various areas, including retail banking, digital banking, and wealth management.
In addition to its business expansion plans, SBI has also been focusing on strengthening its capital base. The bank had recently raised Rs 2,814 crore through the sale of perpetual bonds, which will be used to boost its capital adequacy ratio (CAR).
The sale of overseas bonds is also expected to help SBI diversify its funding sources. The bank has been reliant on domestic deposits for its funding requirements, and the sale of overseas bonds will help it reduce its dependence on this source.
Overall, SBI’s decision to raise funds through the sale of overseas bonds is a positive development for the bank and the Indian banking sector as a whole. The move will help SBI strengthen its capital base, support its business expansion plans, and diversify its funding sources.
However, it is important to note that the success of the bond sale will depend on market conditions. With the COVID-19 pandemic still impacting the global economy, the market conditions for the sale of overseas bonds may not be ideal. SBI will need to carefully evaluate the market conditions before deciding on the timing and size of the bond sale.
In conclusion, SBI’s decision to raise up to $2 billion through the sale of overseas bonds in the fiscal year 2024 is a positive development for the bank and the Indian banking sector. The move will help SBI strengthen its capital base, support its business expansion plans, and diversify its funding sources. However, the success of the bond sale will depend on market conditions, and SBI will need to carefully evaluate the market before deciding on the timing and size of the sale.
Read More on Bank Related News
