SBI Plans to Collect Up to $2 Billion in FY24 via Bond Sales Abroad

State Bank of India (SBI), India's largest public sector bank, is planning to collect up to $2 billion in the fiscal year 2024 through bond sales abroad. The move is part of the bank's efforts to increase its capital base and support its growing loan book.

SBI has been one of the leading players in the Indian banking industry, providing a wide range of financial services to customers across the country. With a strong presence in both rural and urban areas, the bank has been instrumental in driving financial inclusion and supporting economic growth.

The bank's decision to raise funds through bond sales abroad is aimed at diversifying its funding sources and reducing its dependence on domestic deposits. In recent years, SBI has been facing intense competition from private sector banks, which have been able to attract a larger share of deposits from customers.

According to SBI Chairman Dinesh Khara, the bank plans to issue dollar-denominated bonds in FY24, subject to market conditions. The funds raised will be used to support the bank's growth plans and to maintain its capital adequacy ratio (CAR) at a comfortable level.

The CAR is a measure of a bank's ability to absorb losses and is calculated as the ratio of a bank's capital to its risk-weighted assets. SBI's CAR stood at 14.77% as of December 2020, well above the regulatory requirement of 11.5%. However, the bank's loan book has been growing rapidly, and the funds raised through bond sales abroad will help ensure that the bank's CAR remains at a comfortable level.

SBI's move to raise funds through bond sales abroad comes at a time when interest rates in India are at record lows, making it an attractive option for investors looking for higher yields. The bank has a strong credit rating, which should help it attract investors and keep its borrowing costs low.

Overall, SBI's plan to collect up to $2 billion in FY24 through bond sales abroad is a positive development for the bank and the Indian banking industry as a whole. It will help SBI diversify its funding sources, support its growth plans, and maintain its capital adequacy ratio at a comfortable level, all of which are crucial for the bank's long-term success.