InvestorQ : Can you tell me about the Rs.9000 crore bonds that SBI is currently raising?
Arya Nanda made post

Can you tell me about the Rs.9000 crore bonds that SBI is currently raising?

Answer
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Anjana Aiyar answered.
2 months ago


In the case of the SBI bonds, it is not just about the quantum raised but also about the price at which SBI is raising the funds. SBI will raise Rs.8931 crore via 15-year bonds in order comply with Basel III norms at a low coupon of 6.80%.

This is appreciable as the bonds are being sold at a time when the banking sector is awfully saddled with huge NPAs. RBI has projected that the gross NPAs of Indian banks could shoot up from 8.5% this fiscal to 12.5% next fiscal on account of Coronavirus pandemic.

State Bank has already cut its loan-growth target from 10% to 8% for the current fiscal and will adopt a more conservative approach to building its credit book. The SBI bonds in this case will have a call option at the end of 10 years and every year thereafter.