SBI says associates don't need fresh capital this year

Mumbai: The five associate banks of SBI do not require any additional capital infusion this fiscal as the credit growth is tepid, a top official said. He, however, added that the associate banks collectively need up to Rs 30,000 crore in capital over the next five years as they gear up for the higher capital Basel-III regime. "As of now, we are comfortable in terms of capital. No plans of raising funds as of now. There is no credit growth in the market," State Bank of India (SBI) Managing Director and Group Executive for Associates and Subsidiaries V G Kannan    told reporters here over the weekend.   

He said that the five associates - State Bank of Mysore, State Bank of Patiala, State Bank of Travancore, State Bank of Hyderabad and State Bank of Bikaner and Jaipur-- collectively need up to Rs 30,000 crore in capital over the next five years as they gear up for the higher capital Basel-III regime. However, Kannan declined to comment about old speculation that associate banks would be merged with the main parent bank State Bank of India (SBI).   

He said that bond markets and money markets have factored in a rate cut from the Reserve Bank of India already and are moving accordingly at present. "There's a lot of liquidity in the system and market    feels that inflation has also appears to be benign. So bond  markets have factored in an interest rate cut. Deposit rates  are coming down. Rates on commercial papers have come down,"  he said.