Cabinet has approved SBI rights issue. Priya Ranjan Das Munshi, Parliamentary Affairs Minister said that the SBI rights issue modalities are subject to SEBI guidelines. Government will issue bonds to SBI for subscribing to the rights issue and will invest Rs 10,000 crore in the issue.

SBI will likely raise a total of Rs 17,000-18,000 crore via rights. They will be at 20-25% discount to CMP, according to MoF sources.

“The Union Cabinet gave its approval for enhancing the capital of SBI, by subscribing to the rights issue of the equity share of the state of India, amounting to around Rs10,000 crore, against issue of SLR marketable government security. It will create a Securities Redemption Fund for redeeming these securities on the due date. The actual number of shares to be subscribed, coupon rate and tenure of the securities have been worked out with the government, in consultation with the bank. Sebi guidelines, market factors and other relevant factors were kept in mind,” said Priya Ranjan Dasmunsi, Parliamentary Affairs Minister.