The City Union Bank plans to raise Rs 258 crore though a rights issue of shares.
The bank will issue about 12.9equity shares (face value Re 1) at Rs 20 a share.
Eligible employees have been earmarked 2.65 crore equity shares aggregating Rs 53 crore.
The capital raised will be utilised to meet the capital adequacy requirements arising out of growth in the business and to comply with the proposed Basel III norms.
The issue will open on December 17 and close on December 31.
Edelweiss Financial Services is the lead manager to the issue. Karvy Computershare is the registrar to the issue.