New Delhi: Downplaying Moody's decision to downgrade rating of State Bank of India, a senior Finance Ministry official said the government will not fast-track recapitalisation of the PSU bank.
    
"There is no need to panic. We are working on it (recapitalisation). The process will not be fast-tracked because of Moody's downgrade," the official said.
    
State Bank of India (SBI) had submitted the proposal a couple of months back to raise Rs 20,000 crore through the rights issue. The bank requires funding to implement its growth plans over the next two fiscals.
    
The government is the largest shareholder of the bank, with 59 percent equity. It will have to shell out a big amount during the rights issue to maintain its equity holding.
    
The official said SBI is not planning to raise any overseas debt immediately and so the government is not much worried about the ratings downgrade.
    
"Why should we be bothered (by the ratings downgrade)? We are not going to raise any such debt now," he said, adding that "the government is on course to recapitalise the state-run lender, but it will not act in haste to increase the capital".
    
Earlier this week, global credit ratings firm Moody's downgraded SBI's financial strength by one notch to 'D+' from 'C-' on account of its low Tier-I (equity) capital ratio and deteriorating asset quality. The downgrading is likely to make overseas borrowings costlier for the state-owned lender.
    
The rating applies to Perpetual Debt, which is called IPDR, and qualifies for Tier I capital.
    
The bank has so far issued USD 625 million of such debt in two tranches - USD 400 million and USD 225 million. Both these debts are due for call option in 2017.

(Agencies)