SBI Board Approves Raising ₹10000 Cr Through Infrastructure Bonds

The Reserve Bank of India had on Monday said that SBI, along with private sector lenders such as ICICI Bank and HDFC Bank, continue to be Domestic Systemically Important Banks (D-SIBs

New Delhi: In its board meeting held today, India’s largest lender, State Bank of India (SBI) has decided to raise funds through the issue of infrastructure bonds worth up to ₹10,000 crore during financial year 2023.

“The Executive Committee of the Central Board of the Bank at its Meeting held today i.e., 03.01.2023, inter alia accorded approval for raising Infrastructure Bonds during FY23 as under:

Raising Infrastructure Bonds up to an amount of Rs. 10,000 crores through a public -issue or private placement, during FY23,” said SBI in a regulatory filing.

In 2022 December, SBI had raised ₹10,000 crore through its maiden infrastructure bond issue.

The Reserve Bank of India had on Monday said that SBI, along with private sector lenders such as ICICI Bank and HDFC Bank, continue to be Domestic Systemically Important Banks (D-SIBs).

SIBs are perceived as banks that are ‘too big to fail (TBTF)’. The proverbial thinking, “When a big tree falls, the earth shakes”, is the idea behind this classification. If financial sector giants such as SBI or HDFC or ICICI fails, it could create a devastating impact on the country’s economy. This perception gives investors a strong faith that the government support would be there for these lenders in times of (possible) distress. This definitely gives these banks a certain leverage in the market.