India’s leading lender State Bank of India (SBI) has announced that it has raised Rs 2,500 crore by issuing Basel-III compliant bonds.
The committee of directors for capital raising at its meeting held on Tuesday accorded “approval to allot 25,000 Basel-lll compliant non-convertible, taxable, perpetual, subordinated, unsecured, fully paid-up debt instruments in the nature of debentures qualifying as AT 1 capital of the bank, of face value of Rs 10 lakh each, at par, bearing a coupon of 7.73 per cent per annum payable annually with call option after five years and on anniversary dates thereafter, aggregates to Rs, 2,500 crore,” SBI regulatory filing said.
Under call option, the bond issuer can call back the bonds before the maturity date by paying back the principal amount to investors.
The Basel-III capital regulations are globally accepted banking norms under which banks need to improve and strengthen their capital planning processes.
Basel-III norms are being implemented in phases since 2013 by Indian banks to mitigate concerns on potential stress on asset quality and consequential impact on performance and profitability of banks.
SBI had raised Rs 5,000 crore in October by issuing Basel-III compliant bonds.
Shares of SBI on Wednesday rose 1 per cent during the early trading hours on the BSE. However, during the last few minutes of the day’s trade, it was trading down 0.43 per cent at Rs 242.80.