SIB to seek shareholders’ nod to raise Rs 2,500 cr

NEW DELHI: Private sector lender South Indian Bank (SIB) is planning to raise up to Rs 2,500 cr to shore up its capital base for business growth and meet regulatory norms.

The bank’s shareholders had given approval for this fundraise in the previous AGM last fiscal, however, the bank did not raise the funds.

A banking company requires adequate capital not only to meet the needs of a growing business but also to comply with the applicable regulatory requirements, SIB said in a regulatory filing. In its ensuing annual general meeting (AGM) scheduled to be held on July 12, the lender will seek shareholders’ approval to raise tier-I capital of up to Rs 2,000 crore through the issuance of securities by various modes.

It will also seek permission to raise an additional Rs 500 crore to comply with Basel III norms by issuing bonds on a private placement basis. “As the business grows, capital requires to be augmented. The bank expects to continue its robust growth trajectory in the medium to long-term. Availability of adequate capital is one of the key requirements for achieving this feat. “As a proactive move to leverage the available business opportunities and for maintaining appropriate regulatory capitalisation levels, the bank proposes to raise additional capital aggregating up to Rs 2,000 crore or its equivalent amount,” the bank said. Even though the bank has proposed to raise additional capital aggregating up to Rs 2,000 cr during 93rd AGM held on August 18, 2021, due to adverse market situation the bank has not raised the same, it added.