State-owned Bank of Baroda (BoB) on Friday said its board has approved proposal to raise up to Rs 4,000 crore from bonds to fund business expansion.
The board of the bank in its meeting held today "approved raising of Basel III compliant Additional Tier I (AT-1) capital up to Rs 4,000 crore subject to applicable regulatory approval", BoB said in a regulatory filing on stock exchanges.
The fundraising would be by way of a perpetual debt instrument from domestic of overseas markets in Indian rupees or foreign currency to Indian or foreign investors in one or more tranches depending upon the market conditions, it said.
Under the Basel-III norms, AT-1 bonds come with loss absorbency features, meaning that in case of stress, banks can write off such investments or convert them into common equity if approved by the RBI.
AT-1 bonds, which qualify as core or equity capital, are one of the means of raising capital by public sector banks to meet the global norms on capital adequacy (Basel III).
This will be over and above Rs 3,000 crore already approved by board at its meeting held on May 27, 2017, it said.
