Canara Bank plans to raise Rs 2,000 crore considering growing credit demands. Of the total amount, Rs 1,000 crore are to be raised through Basel-III Tier-II bonds maturing in 10 years. As per media reports, the bidding for the bonds will take place on the BSE’s bidding platform between 11 am and 12 pm on August 25.

Primarily meant for banks, tier 2 bonds are components of tier 2 capital. These are debt instruments like loans. Like all bonds and other debt instruments, they do not give ownership or voting privileges but offer interest earnings to bondholders or owners.

For the past few weeks, most banks have been raising funds through fixed deposits, certificates of deposit, and bonds amid rising credit demand. Even though rates on these instruments have been rising since the Reserve Bank of India (RBI) hiked the repo rate 50 basis points in the recent policy, banks are exploring raising funds.

Headquartered in Bangalore, Canara Bank is India’s third largest nationalised bank. Ammembal Subba Rao Pai founded it in 1906.