Mumbai, June 17 (PTI): The State Bank of India will raise up to $2 billion through an overseas bond sale in the next three months.        

“We will be raising $1-2 billion within the next three months,” SBI chairman Pratip Chaudhuri said over the weekend.        

He said although the bank was yet to decide on the exact size of the issue, it would not go for a smaller issue as it would not help a bank of its size.        

The fund infusion will help the bank to augment its tier-II capital adequacy. Its total capital adequacy stood at 13.9 per cent in March, with the core tier-I constituting over 9 per cent.        

The bank was downgraded by rating agency Moody’s last year over fears of asset quality and lower capital adequacy ratio. However, Chaudhuri sounded confident that the lender would not have trouble getting the commitments even in these gloomy times.

He said the bank had written to Moody’s recently to reconsider and upgrade its rating following the infusion of Rs 8,000 crore from the government late last fiscal and a “war against non-performing assets”, which it was winning.        

“We were not in a position to apply for a reversal of the action as our last quarter results were yet to come out and we did not have any numbers to show. Once the results were out, we have written to them,” Chaudhuri said, stating that it would take some time for Moody’s to take an action.        

At its earnings conference in mid-May, Chaudhuri had declared that it had the upper hand over non-performing assets, which had dented its bottomlines in the preceding quarters and would continue to focus on the aspect going ahead.

On possible margin pressures in these uncertain times, Chaudhuri said, “We had set a target of 3.75 per cent for the fiscal and our performance of the first two months (of the financial year) shows that we have exceeded the number.”

On the impact of the reduction in interest rates of up to 3.50 per cent it had announced last week, Chaudhuri said it would shave off up to 0.10 per cent from net interest margin, but added that such a cut in certain segments such as SME loans was necessary as the bank had high rates.