State Bank of India has announced the public issue of lower Tier-II bonds aggregating Rs.500 crore with an option to retain oversubscription upto Rs.500 crore for issuance of additional bonds aggregating Rs.1,000 crore for resident applicants.

The bonds will be issued in two series — Series 1 and Series 2 — having maturity of 10 years and 15 years respectively, with a face value of Rs.10,000 each.These bonds are not redeemable at the option of the bondholder or without the prior consent of RBI.

The issue will be open for subscription from October 18 and will close on October 25, with an option to close earlier as may be determined by the executive committee of the Central Board.

While addressing a press conference to launch the bonds here, SBI Chairman O.P. Bhatt said that the bank would soon hike its lending rates.

SBI is yet to increase its base rate while many banks raised their base rates for lending, after the Reserve Bank of India (RBI) raised policy rates in its mid-term review on September 16. However the SBI increased its deposit rates recently.

The allocation to all categories will be made on “first come first serve basis” based on the date of application. The bonds will be issued compulsorily in dematerialised form.

Application size

For retail applicants Rs.5 lakh; for high network individuals Rs.250 crore and for NII corporate QIB Rs.250 crore.

Keywords: SBIinterest rates

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