SBI To Raise Rs 8,931 Crore By Issuing Basel III-Compliant Bonds
A customer uses an automated teller machine (ATM) at a State Bank of India Ltd. (SBI) branch at night in Bengaluru, India. (Photographer: Karen Dias/Bloomberg)

SBI To Raise Rs 8,931 Crore By Issuing Basel III-Compliant Bonds


The board of State Bank of India has approved a proposal to raise Rs 8,931 crore by issuing Basel III-compliant bonds to investors.

The committee of directors for capital-raising, at a meeting held on Friday, accorded its approval to allot 89,310 Basel III-compliant debt instruments aggregating to Rs 8,931 crore to bond subscribers on Aug. 21, 2020, SBI said in a regulatory filing.

The bonds in the nature of debentures qualifying as Tier II capital of the bank have face value of Rs 10 lakh each, bearing a coupon of 6.80% payable annually for a tenor of 15 years.

SBI said the bonds have a call option after 10 years or any anniversary date thereafter to subscribers. Call option means the issuer of the bonds can call back the bonds before the maturity date by paying back the principal amount to investors.

Under Basel-III capital regulations, banks need to improve and strengthen their capital planning processes. Basel III norms are being implemented in phases since 2013 by the domestic banks to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks.

Also Read: SBI Prices India’s Largest Tier 2 Rupee Bond Offering

On Friday, SBI shares rose 1.87% to Rs 198.35 apiece on the BSE while the benchmark Sensex ended the day 0.56% higher at 38,434.72 points.

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