SBI Board Approves Plan to Raise Rs 20,000 Crore via Bonds in FY26

New Delhi – The board of directors of the State Bank of India (SBI) has approved a proposal to raise ?20,000 crore through bonds during the current financial year (FY26), aimed at strengthening the capital base of India’s largest public sector lender.

In a regulatory filing on Wednesday, SBI confirmed that its Central Board has given the green light for raising funds through the issuance of Basel III-compliant Additional Tier 1 and Tier 2 bonds, denominated in Indian rupees and offered to domestic investors. The fundraise will proceed subject to necessary regulatory approvals.

Following the announcement, SBI’s shares climbed over 2%, reaching an intra-day high of ?834 on the National Stock Exchange (NSE).

This move follows a similar board approval in May 2025, when SBI was cleared to raise up to ?25,000 crore in equity capital during FY26 through Qualified Institutional Placement (QIP), Follow-On Public Offer (FPO), or other permissible routes. The equity infusion is intended to boost SBI’s Common Equity Tier 1 (CET1) capital ratio, further strengthening the bank’s financial stability.

The upcoming QIP is expected to reduce the government’s shareholding in SBI, which stood at 57.43% as of March 31, 2025. SBI has appointed six major investment banks to manage the process, including ICICI Securities, Kotak Investment Banking, Morgan Stanley, SBI Capital Markets, Citigroup, and HSBC.

For the financial year 2024-25, SBI recorded a net profit of ?70,901 crore and paid a dividend of ?8,076.84 crore to the government. Celebrating its 70th year of operations, the bank has reached a balance sheet size of ?66 lakh crore and serves over 52 crore customers.

SBI continues to play a leading role in financial inclusion, operating more than 151 million Jan Dhan accounts and maintaining a widespread correspondent banking network. The bank’s agricultural loan portfolio crossed ?3.5 lakh crore in FY25, making it the highest in the country and a key supporter of farm infrastructure.

Additionally, SBI invested ?610.8 crore in Corporate Social Responsibility (CSR) initiatives during FY25, reaching 94 'Aspirational Districts' across the country with programs spanning healthcare, education, rural development, and environmental sustainability.

With inputs from IANS