SBI not to go for rights issue this fiscal: FM official

India's top lender State Bank of India will not raise funds through a rights share issue this fiscal year and the government, the largest shareholder, will capitalise the bank by other means, Banking Secretary DK Mittal told reporters on Wednesday.

The finance minister, however, has assured that the government will undertake capital infusion in SBI to meet the requirement of 8% tier-I capital.

While a rights issue is ruled out, the government is considering a preferential share allotment, convertible shares or warrants for the capital infusion in SBI.

The Finance Ministry is also considering financing the capital infusion by setting up a SPV that will hold equity in PSU banks. The SPV will then finance recapitalisation through dividends and global debt.

With inputs from PTI