SBI to raise Rs 800-1,200 cr by issuing shares to employees

State Bank of India has proposed to offer share purchase scheme for all its employees which could raise additional equity capital, between Rs 800 crore (Rs 8 billion) and Rs 1,200 crore (Rs 12 billion), for the country's largest lender.

"We are planning to offer employees share purchase scheme and not employees stock option scheme," SBI Chairperson Arundhati Bhattacharya said in Kolkata on Friday during her first visit to the city after taking over as the chief of the bank.

"We have written to the government on this. We cannot say about the valuation now, but the total amount will be worth Rs 800-1,200 crore (Rs 8-12 billion)," she said without divulging details on how different would be the bank's scheme from traditional Esops.

"How much the bank's equity capital increases would depend on the valuation

at which the bank would offer shares to its employees.

Bhattacharya was talking to reporters at the Tata Medical Centre at Rajarhat, New Town, where the bank donated about Rs 6 crore (Rs 60 million) towards part cost of a new Pet CT scan machine at the hospital.

She said the share purchase scheme would be offered to all bank employees, irrespective of their posts.

"The bank will offer shares to employees at a discount from market price.

“We hope to implement this in the next fiscal (2014-15), subject to approval," Bhattacharya said.

The bank had 223,000 employees on its rolls as on December 2013.

On selling of non-performing assets, Bhattacharya said there were some plans regarding this and remained optimistic on recovery.

"You are only concentrating on the 5 per cent.

“But, we have also to concentrate on the 95 per cent of the credit," she added.