Axis Bank plans to raise Rs 6,000 cr via long term bonds

This comes after RBI incentivised banks to raise long term bonds by relaxing norms

Axis Bank-country's third largest private sector bank-has now joined the bandwagon of lenders that will be raising money via long term bonds.

In a statement to the exchanges, the lender has informed that the board of directors has approved issuance of long term bonds/non-convertible debentures up to Rs. 6,000 crore on a private placement basis.

The notice said that now shareholder's approval will be sought for this issue.

Axis Bank management in the earnings conference call after the first quarter result had mentioned that they would explore the option of floating long term infrastructure bonds as they look attractive.

This comes after Reserve Bank of India has incentivised banks to raise long term bonds by relaxing the norms. The central bank had said that long-term bonds (tenor of more than seven years) will be exempt from cash and statutory reserve requirements if the proceeds are used to fund new long-term infrastructure projects and affordable housing.

Also, the loans funded via this process will be exempt from the computation of adjusted net bank credit for the purpose of calculating priority sector lending requirements.