Allahabad Bank raises Rs 500 crore in debt to comply with Basel III norms

State-owned Allahabad Bank on Friday said it has raised Rs 500 crore to comply with the global banking standards under Basel III.

The bank had earlier in May informed about getting board approval to raise additional tier I capital worth Rs 2,000 crore through a private placement in one or more tranches within this financial year.

"The bank has to date successfully raised additional tier I capital of bank through a private placement of AT 1 perpetual bonds aggregating to Rs 500 crore," Allahabad Bank said in a regulatory filing.

The bonds carry a coupon rate of 10 per cent per annum.

To comply with Basel-III Capital Regulations, banks need to improve and strengthen their capital planning processes.

These norms are being implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks.

Indian banking system has been implementing Basel III standards in phases since April 1, 2013. The banks are expected to fully implement these norms by March 2019.

This will align full implementation of Basel III in India closer to the internationally agreed date of January 1, 2019.

Stock of the bank closed 1.01 per cent down at Rs 73.40 apiece on BSE today.