Money & Banking

SBI raises ₹5,000 cr by issuing Basel-III compliant bonds

PTI New Delhi | Updated on October 26, 2020

The State Bank of India (SBI) on Monday said it had raised ₹5,000 crore by issuing Basel-III compliant bonds.

The committee of directors of capital raising met on Monday and accorded its approval to allot 50,000 Basel-III compliant non-convertible, taxable debt instruments, SBI said in a regulatory filing.

The debentures qualifying as tier II capital of the bank of the face value of ₹10 lakh each, at par, bearing a coupon of 5.83 per cent aggregating to ₹5,000 crore were allotted to bond subscribers on October 26, 2020, it said.

The interest on the bonds will be paid annually for a tenor of 10 years and call option after five years and on anniversary date thereafter, the country’s largest lender said.

Under the 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.

Shares of SBI on Monday closed 2.96 per cent lower at ₹196.75 apiece on the BSE.

Published on October 26, 2020

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