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Bank of Baroda to raise Rs 4,000 cr from bonds to fund business expansion

The fundraising would be by way of a perpetual debt instrument from domestic of overseas markets in Indian rupees

Press Trust of India  |  New Delhi 

A branch of Bank of Baroda. Photo: Wikipedia
A branch of Bank of Baroda. Photo: Wikipedia

State-owned (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 (AT-1) capital up to Rs 4,000 crore subject to applicable regulatory approval", 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 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, can write off such investments or convert them into common equity if approved by the AT-1 bonds, which qualify as core or equity capital, are one of the means of raising capital by public sector 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.

First Published: Fri, December 22 2017. 22:18 IST
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