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SBI hopes to retain Rs 12,000 cr from RIB redemptions
New Delhi, July 13: State Bank of India is targeting to retain at least Rs 12,000 crore of the redemption from Resurgent India Bonds (RIBs), which mature for payment on October one this year.
New Delhi, July 13: State Bank of India is targeting to retain at least Rs 12,000 crore of the redemption from Resurgent India Bonds (RIBs), which mature for payment on October one this year.
"We are awaiting the permission of the Reserve Bank and government to launch a new deposit scheme through which the bank hopes to retain over Rs 12,000 crore of the total Rs 25,000 crore RIB proceeds," official sources said here.
SBI is slated to redeem RIBs either in cash or offer an option to reinvest it in a special deposit scheme.
The special scheme is likely to be in the form of a NRI deposit scheme offering a higher return than that offered by similar schemes of banks. The RIBs, launched in 1998 were a roaring success, even at a time when India was facing economic sanctions following the nuclear tests.
SBI, which had targeted to mop up 2.0 billion dollars, actually raised over 4.2 billion dollars through the 5-year tax-free quasi-sovereign bonds offering an attractive 7.5 per cent return.
SBI officials said the response on rib from nris had been overwhelming. "Many of them especially in the Gulf nations, are still seeking a safe and attractive scheme to reinvest the RIB proceeds," they said. The maturity amount of RIBs would be paid in US dollars or UK pounds or Euro in case the bondholders continue to be a NRI or have become a resident in India before the maturity of the bonds.
Resident Indians can place their RIB proceeds as term deposits or in resident foreign currency accounts of SBI.
The bank would pay in non-repatriable Indian rupees at the prevailing forex rates if the bondholder is a resident Indian.
SBI's officer on special duty for RIBs, G C Jashnani, said bondholders would be advised to deploy the RIB funds in different schemes of SBI for getting an attractive return in future also.
SBI has set up a RIB redemption cell to ensure smooth repayment of RIB proceeds to investors from October 1.
Meanwhile, Reserve Bank has bought 4.2 billion dollars for the RIB redemptions, while government is slated to provide the difference which may arise out of exchange rate fluctuations. Bureau Report
SBI is slated to redeem RIBs either in cash or offer an option to reinvest it in a special deposit scheme.
The special scheme is likely to be in the form of a NRI deposit scheme offering a higher return than that offered by similar schemes of banks. The RIBs, launched in 1998 were a roaring success, even at a time when India was facing economic sanctions following the nuclear tests.
SBI, which had targeted to mop up 2.0 billion dollars, actually raised over 4.2 billion dollars through the 5-year tax-free quasi-sovereign bonds offering an attractive 7.5 per cent return.
SBI officials said the response on rib from nris had been overwhelming. "Many of them especially in the Gulf nations, are still seeking a safe and attractive scheme to reinvest the RIB proceeds," they said. The maturity amount of RIBs would be paid in US dollars or UK pounds or Euro in case the bondholders continue to be a NRI or have become a resident in India before the maturity of the bonds.
Resident Indians can place their RIB proceeds as term deposits or in resident foreign currency accounts of SBI.
The bank would pay in non-repatriable Indian rupees at the prevailing forex rates if the bondholder is a resident Indian.
SBI's officer on special duty for RIBs, G C Jashnani, said bondholders would be advised to deploy the RIB funds in different schemes of SBI for getting an attractive return in future also.
SBI has set up a RIB redemption cell to ensure smooth repayment of RIB proceeds to investors from October 1.
Meanwhile, Reserve Bank has bought 4.2 billion dollars for the RIB redemptions, while government is slated to provide the difference which may arise out of exchange rate fluctuations. Bureau Report