The country’s largest lender, State Bank of India, plans to raise Rs 11,000 crore through additional tier-I and tier-II bonds to meet regulatory requirements and support business growth.

The bank informed the BSE that the SBI board approved plans to raise funds by issuing Basel III company debt instruments in rupees, US dollars or any other convertible currency.

With the consent of the Indian government, the board agreed to raise Rs 7,000 crore in new AT1 capital and up to Rs 4,000 crore in new tier-II capital, the lender said.

At the end of March 2022, SBI’s capital adequacy ratio was 13.83%, 11.42% for tier-I and 2.41% for tier II.
Earlier this month, public sector lender Punjab National Bank raised Rs 2,000 crore in tier-I bond capital with a penalty rate of 8.75%.

Other public sector lenders have also developed financing plans. Union Bank of India and Canara Bank plan to raise Rs 4,000 crore by issuing AT1 bonds.

In December last year, SBI raised around Rs 3,974 crore through AT1 bonds. The bonds have a fixed coupon of 7.55%, 17 basis points lower than the previous issue in September 2021, when the bank issued Rs 4,000 crore AT1 bonds at 7.72%.