The bank had earlier planned to raise $1 billion through a medium-term note (MTN) issue, but decided to re-work it because of unfavourable market conditions.

Its overseas fund-raising plans also took a hit after Moody’s Investors Service cut its rating to D+ from C- earlier this month. The rating agency also lowered SBI’s hybrid debt rating to Ba3 (hyb) from Ba2 (hyb). The rating downgrade will lead to higher borrowing costs for the state-run bank. Typically, banks raise funds from overseas markets to meet foreign currency needs of their Indian clients.

Contractor said if the bank decided to go ahead with the MTN issue, it would aim to raise at least $500 million. He, however, clarified there was no urgency in raising these funds. Money raised through such issues is classified as tier-II capital for banks.

SBI had earlier raised funds through MTNs to finance Tata Steel’s acquisition of Corus in the United Kingdom. It had lent $1 billion to the Indian steel maker for its $12.9-billion acquisition of the Anglo Dutch steel producer.

Senior SBI officials said the bank would need around Rs 7,900 crore from the government by the end of this financial year to maintain its tier-I capital adequacy ratio at eight per cent. SBI closed the first quarter of this financial year with a tier-I capital adequacy ratio of 7.6 per cent. Contractor said growth in SBI’s overseas operations had moderated a tad this financial year from a year ago. So far this financial year, the country’s largest lender has opened six overseas branches in the United Kingdom, Nepal, Mauritius and Saudi Arabia. It plans to set up a branch in Qatar soon.

SBI Card on Friday launched a foreign travel card, Vishwa Yatra Foreign Travel Card, in Saudi Riyal to allow its customers carry foreign currency safely. The product is aimed at overseas travellers to Saudi Arabia, particularly the Haj and Umra pilgrims.