Mumbai, July 13: The State Bank of India has intimated the Bombay Stock Exchange that in future it will not fix a record date for the payment of interest for its unsecured redeemable subordinated floating interest rate bonds.

With reference to the terms of clause 21 of the Listing Agreement and as per the terms of the offer document, the bonds carry a floating rate of interest payable half-yearly at the rate of 3 per cent over the bank's maximum term deposit rate. This term deposit rate is fixed on January 1 and July 1 each year.

The bondholders (transferors) are expected to abide by the dates declared by the bank for the payment of interest on the bonds.

The maximum rate of interest on the bank's term deposits is 12 per cent per annum as on July 1, 1997. Accordingly, the rate of interest payable on the bonds on January 1, 1998, for the interest payable on the bonds for the interest period from July 1, 1997 to December 31, 1997, is fixed at 15 per cent per annum.

Further, the bank has also explained in its letter to the BSE, highlighting Clause 16 of the listing agreement of the exchange, that the interest would be payable half-yearly and is due on January 1, 1998.

SBI has also intimated its bondholders that in case of transfer of bonds, the notification and mandate for transfer should be sent to the bank's transfer agents, MCS Ltd, at least 30 days before the due date (before December 2, 1997) for the payment of the interest.

However, in case the bondholders do not receive the interest due to delay in transfer, the bank will in no way take up responsibility.

The issue of floating bonds at Rs 1,000 (at par) in December 1993 was an exercise to achieve a higher capital adequacy ratio of 8 per cent by 1994.

The bonds have been listed on the Mumbai, Calcutta, Chennai, Delhi and Ahmedabad stock exchanges. Currently, the bond is quoting at a price of Rs 1,005 on the Bombay Stock Exchange.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.