State Bank of India's proposal for raising its foreign holding by about 8.0 per cent is being examined by the government, its chairman A K Purwar said on Tuesday.

In a bid to improve its share value, SBI had proposed to the finance ministry last year that its Global Depositories Receipts totalling 7.89 per cent of its total shareholding be treated separately from its foreign holding of 20 per cent.

"It is still under examination. The government takes its own time," Purwar said on the sidelines of an accounting seminar in New Delhi.

If the GDR proceeds are treated separately, then the bank's foreign holding is slated to go up by 7.89 per cent.

The price of the SBI shares have gone up significantly in the last few months with significant interest from foreign institutional investors. The share price of the country's biggest bank was hovering at over Rs 265.

The SBI chief favoured the notion of attaching a premium on bank equities, which are being returned to the government.

"SBI is not affected by it. If I put money in risk capital, I would like to have a risk related return," he said.

On the proposed buyback of government securities from banks and financial institutions, Purwar said, "We have all the 24 securities in our portfolio. We are having a close look."    

The government intends to buy back 24 illiquid securities worth over Rs 82,500 crore (Rs 825 billion) from the banks and FIs as part of efforts to reduce its interest burden.

It is expected that SBI along with LIC would sell a chunk of these securities when the scheme starts through an online screen-based auction from July.