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Central Bank of India to raise up to Rs 500 crore via issuing Basel III compliant bonds

The bank said that the fund will be raised by issuing non-convertible redeemable unsecured Basel III compliant tier 2 bonds in the nature of promissory notes.

SNS | New Delhi |

Central Bank of India on Friday said it will raise up to Rs 500 crore through by issuing and allowing Basel III compliant bonds.

“… the Board of Directors of the Bank at its meeting held today i.e. 11th December 2020 considered and approved the proposal for raising capital funds up to Rs 500 crore by issuance and allotment of Non-Convertible Redeemable Unsecured Basel Ill compliant Tier 2 Bonds,” the bank said in a regulatory filing.

The bank said that the fund will be raised by issuing non-convertible redeemable unsecured Basel III compliant tier 2 bonds in the nature of promissory notes.

Promissory notes are debt instruments with a promise by the issuer to repay the lender the amount with interest and it allows companies or individuals to get funds other than banks.

Basel-III compliant bonds have both higher capital requirement and loss-absorption features compared with Basel II. The Basel-III regulations are aimed to enhance the quality and quantity of capital held by banks.

Shares of Central Bank of India closed 0.33 per cent down at Rs 14.90 apiece on the BSE on Friday.