SBI raises 15 bln rupees through 3-month CD at 7.08%, say sources
This story was originally published at 19:02 IST on 30 July 2024
Register to read our real-time news.Informist, Tuesday, Jul 30, 2024
MUMBAI – State Bank of India raised around 15 bln rupees through certificates of deposit maturing in three months at a rate of 7.08%, sources told Informist. The market was unsure about why India's largest lender have to tap the debt market at a time when the banking system was flush with liquidity. The liquidity surplus in the banking system was at 1.14 trln rupees on Monday compared to 1.45 trln rupees on Friday, data from the Reserve Bank of India showed.
A section of the market believed that the bank tapped the short-term debt market as a routine check to test its ease of borrowing, dealers said. "The issuance does not seem to have a connection with liquidity requirements. Had the issuance been for fund requirement, they would have issued a higher quantum and better levels," a dealer at a mutual fund said. "Generally, banks every six months or a year, are required to conduct an exercise that would allow them to test the ease of borrowing through this."
However, some market participants speculated that the fundraising was more than just a routine exercise, and linked it with a possible requirement for asset liability management. "I do not believe this is the reason because I heard they were looking to raise more funds," a dealer at a mid-sized brokerage firm said. "They wouldn't have done that if they were just looking to test ease of borrowing."
SBI, which is not a frequent issuer in the short-term debt market, had last tapped the short-term debt market in May 2023. The bank then raised 5 bln rupees through bonds that matured on May 17 this year at a coupon of 7.35%.
Today, shares of the bank closed 0.1% higher at 872.80 rupees on the National Stock Exchange. End
Reported by Siddhi Chauhan
Edited by Vandana Hingorani
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2024. All rights reserved.
To read more please subscribe
Share this Story:
