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SBI to raise Rs 500 crore via retail bonds

Date: 08-09-2010

State Bank of India plans to tap retail investors via a bond issue in October. The executive committee of the bank's board accorded approval for raising Tier II capital by way of public issue of Lower Tier-II bonds for Rs 500 crore with an option to retain 100 per cent oversubscription.

Given that deposit rates are firming up and depositors prefer to lock up surplus funds for no longer than three years, retail bonds, which could be of 10-15 years tenure, are the best bet for banks to mop up long-term funds at a mark-up to a benchmark rate.crackcrack