JOIN USState Bank of India, on Monday, ruled out any more lending to debt ridden Kingfisher Airlines (KFA). “Banks will not lend any more money and urged the KFA to pump in fresh equity as the airline had no room for further borrowing to run its operations,” SBI Chairman & Managing Director Pratip Chaudhary said.
He was in City to donate a School Bus to Angavikalara Ashakiran Trust, Davangere. State Bank of India is likely to come out with its medium term debt bond issue to the tune of US$1 billion (about Rs 5,500 crore) by August this year.
He said currently the Tier-1 Capital Adequacy Ratio was at 9.67 per cent and SBI was not stressed for capital. Moreover the bank’s profitability during the current fiscal was also expected to be good.
“What we are contemplating is a medium term bond issue, which is not capital but debt. The amount yet to be decided. Whenever we came to the market earlier, it was $1 billion. We have time till August. But the exact time of hitting the road has to be decided,” he added.
He said further CRR (cash reserve ratio) cut by RBI can pave the way for lowering of interest rates.
“Since RBI has reduced the CRR by 1.25 per cent recently, we have already reduced the interest rates on our car and education loans and we are making deep cuts in our lending to SMEs.” SBI’s base lending rate is at 10 per cent, lowest among public sector banks. Hence, we did not reduce the base rate after rate reduction, he added.