State Bank of India, the country's largest lender, on Thursday said its board has approved the sale of 2.1 per cent stake in its subsidiary, SBI Life Insurance Company, to comply with the minimum public float requirement of 25 per cent. The stake sale will be conducted via offer for sale (OFS) process through stock exchange mechanism as per the regulatory prescription.

In an exchange filing, SBI said that its board has approved the divestment of 2.1 crore equity shares in SBI Life Insurance Company.  "The executive committee of the central board of directors of State Bank of lndia has approved the divestment of 2,10,00,000 equity shares constituting 2.1 per cent of our stake in SBI Life to achieve minimum public shareholding of 25 per cent," the public sector lender said in a filing to the Bombay Stock Exchange.

As of March 31, 2020, SBI was the majority shareholder with 57.60 per cent stake in SBI Life Insurance.

Established in 2001, SBI Life Insurance company is a joint venture between State Bank of India and BNP Paribas Cardif, a French multinational bank and financial services company.

The bank, however, did not disclose the floor price for the stake sale. Meanwhile, shares of State Bank of India closed day's trade at Rs 177.20, down 5.64 per cent, on the BSE.  SBI Life Insurance Company's shares ended 0.2 per cent lower at Rs 741.45 apiece.

In a separate development, SBI said that its board also approved the proposal to raise long term funds up to $1.5 billion in single or multiple tranches during financial year 2020-21. The executive committee of the central Board in its meeting held on June 11 approved "to examine the status and decide on long term fundraising in single or multiple tranches up to $1.5 billion through public offer or private placement of senior unsecured notes in US Dollar or any other convertible currency during FY 2020-21".

By Chitranjan Kumar