State Bank of India (SBI) on Wednesday said its board has approved a fund raising of ₹20,000 crore.

“We submit that the Central Board at its meeting held today... has, inter alia, accorded approval for raising long term bonds up to an amount of ₹20,000 crore through a public issue or private placement, during 2024-25,’’ the country’s largest lender said in a regulatory filing on Wednesday.

Shares of the PSU bank ended at ₹852.60, a gain of 0.95 per cent, or ₹8, over the last close. The bank had a market capitalisation of ₹7,60,912.41 on the BSE on Wednesday.

Last week, SBI had announced the mobilisation of ₹830 crore via bonds.

SBI has completed the issuance of $100 million senior unsecured floating rate notes having a maturity period of three years.

The bonds were issued through its London branch. The bank will utilise the funds to support its business expansion.

The fund raising comes at a time credit in the banking system is showing a strong growth of around 20 per cent.

SBI chairman Dinesh Khara recently told the PTI that the bank is expecting a loan growth of 14-15 per cent in this fiscal.

“Hence, 14-15 per cent credit growth depends upon the opportunities available for lending, and it meets our risk appetite. We will be happy to grow at this pace,” he told the news agency.

As far as deposits are concerned, he said, it grew by 11 per cent last year.

Last month, SBI had increased the fixed deposit rate on select short-term maturity up to 75 basis points. For retail term deposits of 46-179 days, the rate increased by 75 basis points to 5.50 per cent against the earlier 4.75 per cent.

Tax relief

The SBI chairman has pitched for tax relief on interest income, saying it would help banks to garner savings that could be used for funding long-term infra projects.

At present, banks are required to deduct tax when interest income from deposits held in all the bank branches put together is more than ₹40,000 in a year. With regard to savings accounts, interest earned up to ₹10,000 is exempt from tax.

“If at all some relief could be given in the Budget regarding tax on the interest earnings, it will be an incentive to depositors. Eventually, the banking sector uses deposits mobilised for the capital formation in the country,” he told PTI in an interview.

The full budget for 2024-25 is likely to be presented next month.