In a recent official statement, the State Bank of Hyderabad (SBH) has announced that it is planning to raise a huge amount of Rs 900 crore in the near future for meeting the Basel-II compliance requirements for Accounting Standards 15 (AS15). The officials from the bank have stated that they would also utilize the money for its expansion plans in the next year.
The Managing Director, State Bank of Hyderabad, Mr. Amitabha Guha was elaborating the banks plans further and said that they have already mobilized an amount of Rs 500 crore so far via the upper tier-II mode since 18th March this year and they would source the remaining amount through perpetual bonds. He said that the fund-raising has become necessary for the bank due to a one-time provisioning of around Rs 450 crore by the SBH for meeting the AS15 requirements.
The experts commented that the bank is having two options on the AS15 front - one is the adoption in phases over a period of five years and the other one is the implementation in one go. While commenting on the options, Mr. Guha said, "We will prefer to do it the latter way". He further said that the capital adequacy ratio of the bank would be 10.50 per cent in comparison to the 12.5 per cent as measured under Basel-I, after the mobilization of the proposed capital.
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| Posted : 3/25/2008 |
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