Bank of Baroda on Friday said it has raised Rs 764 crore by issuing Basel III compliant bonds on private placement basis. The bank has issued and allotted unsecured rated listed subordinated non-convertible fully paid-up Basel III additional tier 1 perpetual bonds, it said in a regulatory filing. The bond carries coupon rate of 8.25 per cent. Perpetual bonds carry no maturity date and hence may be treated as equity, not as debt.
The public sector bank said the issue of the bond opened on July 15 and closed on the same day, while the allotment was done to a total of 18 allottees on July 17, 2020. To comply with Basel-III Capital Regulations, banks need to improve and strengthen their capital planning processes.
These norms are being implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks. Indian banking system has been implementing Basel III standards in phases since April 1, 2013. The banks were expected to fully implement these norms by March 2020. Stock of Bank of Baroda closed at Rs 49.40 apiece on the BSE, up 2.70 per cent from previous close.