Public sector lender Bank of Baroda today said it has received approval to raise raise up to Rs 2,000 crore by issuing Basel III compliant bonds on a private placement basis.
“The capital raising committee of the board has authorised the bank to raise funds through issuance of Basel III compliant additioanl tier-I capital bonds (perpetual debt instrument) for Rs 1,000 crore with green shoe option of Rs 1,000 crore (total size not to exceed Rs 2,000 crore) on private placement basis,” it said in a regulatory filing.
The timing, coupon rate, tenure etc, will be decided by the management at the appropriate time and intimated to the stock exchanges, it added.
The public sector banks are on a spree to strengthen their tier-I capital as a required to be fully compliant with Basel -III norms by March 2019.
The norms are being implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks.
Bank of Baroda shares closed 0.89 per cent down at Rs 156.25 on BSE