Canara Bank to raise Rs 1,500 cr via bonds

State-owned Canara Bank Wednesday said it has proposed to raise Rs 1,500 crore through bonds, to fund business growth.

The bank plans to raise the fund through Basel-III compliant additional tier I (AT-1) bonds, Canara Bank said in a regulatory filing.

It further said the bank has floated bids for appointment of merchant bankers or arrangers for the fundraising.

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 Reserve Bank of India.

AT-1 bonds, which qualify as core or equity capital, are one of the means of raising capital by public sector banks that require Rs 2.40 lakh crore by March 2019 to meet global capital adequacy norms (Basel III).