Tag Archives: State Bank of India

Banking, Business, Corporate, India

Jet Airways is grounded as consortium of lenders refuse to fund critical services

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Newsroom24x7 Network

Mumbai: Late night this past Tuesday 16 April 2019, Jet Airways was informed by the State Bank of India (SBI), on behalf of the consortium of Indian Lenders, that they were unable to consider its request for critical interim funding.

Since no emergency funding from the lenders or any other source was forthcoming, the airline would not be able to pay for fuel or other critical services to keep its operations going.

Consequently, with immediate effect, Jet Airways has been compelled to cancel all its international and domestic flights.

The last Jet Airways flight operated on Wednesday.

Through its emergency communique, Jet Airways has announced that now it shall await the bid finalisation process by SBI and the consortium of Indian Lenders.

In its response to the airline, the lenders have said, “The Expressions of Interest (EOI) have been received and bid documents have been issued to the eligible recip-ients today. The bid documents inter alia has solicited plans for a quick revival of the company. The bid process will conclude on 10th May 2019 … We are actively working to try and ensure that the bid process leads to a viable solution for the company.”

Jet Airways has assured that it will continue to support the bid process initiated by the lenders.

In the meanwhile, Jet Airways has informed all guests about the temporary suspension of flight operations via text message or email to the contact details listed in their bookings.

CLICK HERE for Message from Jet Airways CEO

Naresh Goyal

On March 25, when the Chairman of Jet Airways Naresh Goyal stepped down, the Board of Directors of the airline had approved the following:

The conversion of INR 1 of Lenders’ debt into equity by the issuance of 11.4 crore equity shares, in accordance with the RBI Circular of 12th February, 2018.
With this, the consortium of Indian lenders, led by State Bank of India (SBI), will become the majority shareholders of Jet Airways.

Reconstitution of the Board of Directors of the Company by:
Resignation of Promoter, Naresh Goyal, Ms. Anita Goyal, and Kevin Knight, nominee director of Etihad Airways from their positions on the Company’s Board.

The two nominees of the Promoter and one nominee of Etihad Airways will continue on the Board.

Two lender nominees will be inducted to its Board, subject to the receipt of requisite approvals.

As part of the Resolution Plan, the Lenders will provide an immediate interim funding support of INR 1500 crore to Jet Airways. The Company will also engage with payment intermediaries for release of trapped cash. The airline will leverage the funding to partly clear pending dues towards lessors, vendors, creditors and employees in a phased manner. The move will see Jet Airways re-deploy several of its grounded aircraft back into its network, helping renew many of the routes it had temporarily suspended, which will help restore normalcy of operations, aiding the airline’s long term transformation to continue expansion and to regain its position as a global player.

An Interim Management Committee (IMC) has been constituted to oversee the overall financial and operational performance of the airline under the overall supervision of the Board of Directors with the support of McKinsey & Co.

Banking

State Bank of India comes under attack on minimum balance penalty

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Newsroom24x7 Staff

I understand that the bank is having financial difficulties but this is not how they are going to make up the deficit.

Bhopal: K.K. Sethi, a retired bureaucrat, was in for a rude shock today when the State Bank of India (SBI) charged him Rs. 115 on the ground that he was not maintaining the mandatory minimum balance during the month.

Narrating his woe, Sethi told Newsroom24x7 that all the time, he had maintained Rs. 1,65,000 in his account but it was a sweep account where they send the money in excess of a limit and bring it back when it falls short of that limit. In his case the limit is Rs. 25,000, which is much in excess of what is the minimum balance required.

Instead of transferring the amount back, they want to tax me for no fault of mine, Sethi said adding “I understand that the bank is having financial difficulties but this is not how they are going to make up the deficit.” The former bureaucrat, known for his upright image and no-nonsense stance throughout his illustrious career, described the bank’s action as “downright illegal and immoral”.

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KK Sethi

KK Sethi, a retired IAS officer, is highly respected for his commitment to the larger cause of society. He has held several important posts and was Chief Secretary Manipur and President Board of Revenue in Madhya Pradesh. As Commissioner for Linguistic Minorities, he had presented to the President of India, the forty-fourth Annual Report under Article 350- B (2) of the Constitution. For the implementation of the constitutional provisions and Nationally Agreed Scheme of Safeguards provided to linguistic minorities, the report recommends action to be taken by the Central Government and various State Governments / Union Territory Administration, to assuage the feelings of the linguistic minorities.

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Banking, India

SBI announces financing of rooftop solar projects worth Rs. 400 crore with private developers

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Newsroom24x7 Network

New Delhi: The State Bank of India (SBI) today announced financing of rooftop solar projects worth Rs. 400 crore, with private developers. This would add at least 100 MW of rooftop solar capacity to the grid, and is a significant step towards meeting the Government of India’s target for 40 GW of rooftop solar installations.

SBI has availed loan of USD 625 million from the World Bank for on-lending to viable Grid-Connected Rooftop Solar PV (GRPV) projects undertaken by PV developers/aggregators and end-users, for installation of rooftop solar systems on the rooftops of commercial, institutional and industrial buildings. Implementation of the program by SBI will support the installation of more than 600 MW of rooftop solar capacity. With the World Bank funded capacity development program, SBI is making efforts to expand and incentivize the market for rooftop solar power by way of low cost financing. Financing is being provided to those with sound technical capacity, relevant experience, and creditworthiness, meeting SBI standards.

Developers that the SBI will be financing under this Program include Azure Power, Amplus, and Cleanmax amongst others. The capacity of the projects and programs financed range from 25kWp to 16MW.

“As the largest Bank in India, SBI is committed to finance renewable energy projects to support the Government of India in realising its renewable energy targets. With the World Bank loan, SBI aims at developing the nascent rooftop solar market. As a tropical country, India has a huge potential to be the leader in the rooftop solar space,” said Karnam Sekar, Deputy Managing Director, SBI.

“In order to accelerate demand for rooftop solar systems in the market, SBI has developed financing models that will provide loans at a very competitive pricing with long tenor. Several capacity building measures and awareness programs are being undertaken to sensitize operating functionaries. So far, SBI has sanctioned GRPV projects with aggregate capacity of 100 MW, and proposals are in the pipeline with aggregate capacity of around 125 MW. Going forward, off-take of loan would accelerate as awareness builds up in the market for grid-connected solar rooftop,” he added.

Aided by government policy and declining costs, rooftop solar has the potential to transform the energy sector.

“We are very pleased that SBI has achieved this first important milestone, of financing 100 MW of solar PV capacity to solar. The World Bank is strongly supportive of the government’s plans to harness this potential. Solar PV will not only improve access to electricity, but it will do so in a manner that avoids the environmental impacts of other traditional electricity sources. Through this project and others like it, tens of millions of electricity customers will eventually be able to generate part of their own electricity needs from one of the cleanest sources of energy available,” said Riccardo Puliti, Senior Director, World Bank.

India is one of the lowest per capita consumers of electricity in the world. Over 200 million people remain unconnected to the electricity grid, and those who are, continue to face frequent disruptions. Power shortages also affect industrial output with many industries and manufacturers relying on expensive and polluting diesel-based back-up power supplies.

Despite energy shortages, and the high cost of backup supply, rooftop solar PV systems have not yet become widespread in India. This is primarily due to the lack of adequate financing, unfamiliar technology and low consumer awareness. Until now, those that wanted to install rooftop solar PV systems had to pay the full cost up-front. The total capacity of rooftop solar, therefore, remains low.

The World Bank-Clean Technology Fund (CTF) loan will support a number of solar PV business models, to expand the reach of rooftop PV systems to a variety of customer groups. A range of options available to investors under the SBI Rooftop PV Program will include third-party ownership, leasing, rooftop rental, as well as direct end-user ownership.

The World Bank is also providing a Global Environment Facility (GEF) grant to support the overall capacity development of the sector. This grant will (i) support an innovative risk mitigation mechanism to enable lending to small and medium enterprises (SME), commercial and industrial customers for GRPV, and (ii) to support strengthening of the investment climate and capacity building of the main stakeholders involved in the expansion of GRPV.

Banking

SBI’s core capitalisation to improve in the financial year ending-March 2017

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Newsroom24x7 Staff

fitch ratingsSingapore/Mumbai: Fitch Ratings expects SBI’s core capitalisation to improve in the financial year ending-March 2017 (FY17), from a core equity Tier 1 ratio of 10.3% at end-September 2016.

SBI is likely to receive around USD835 million in new capital from the government shortly (of the total USD1.1 billion earmarked for FY17; around 5% of FY16 equity) and plans to raise an additional USD2.2 billion directly from the market, for which it has received shareholder approval.

The bank’s NPL ratio of 7.1% at end-1HFY17 and stressed asset ratio of 9.6% have moderately picked up in 1HFY17, but remain considerably lower than those of other large state banks.

Fitch Ratings has assigned State Bank of India’s (SBI, BBB-/Stable) USD500 million senior unsecured notes due January 2022 a final rating of ‘BBB-‘.

This follows the completion of the securities issue and the receipt of final documents conforming to information previously received. The final rating is the same as the expected rating assigned on 16 January 2017.

The notes constitute the issuer’s direct, unconditional, unsubordinated and unsecured obligations and rank pari passu among themselves and SBI’s all other unsubordinated and unsecured obligations.

The notes were issued by SBI’s London branch with a tenor of five years.