The Reserve Bank of India is likely to announce another rate cut in its October policy, said Dinesh Kumar Khara, managing director and group executive at SBI.
Speaking about the reduction in risk weight for consumer loans by RBI, Khara said, “As far as the reduction in the risk weight for consumer loans is concerned, the capital required for supporting the consumer loan portfolio would be lowered down because of the lower risk weightage for the consumer loans. So, for the same capital, one can support a much larger consumer loan book.”
Elaborating on the offer for sale (OFS) for SBI’s stake in SBI Life, he said, “This was in two phases. Part of it we offered yesterday which was Rs 3.5 crore with the right of oversubscription. In the event of oversubscription, we had offered additional Rs 1,000 crore also and that is made available today. We have got an option of oversubscription of 1 percent via OFS.”
Khara further added that the OFS is not for meeting the capital requirements for the bank. “This is essentially for meeting the MPS requirement which we have to comply with by September 30 2020,” he said. Post the stake sale, SBI’s holding in SBI Life will be 57 percent as compared to current 62 percent, Khara mentioned.