Canbank Set To Raise Rs 500 Cr Via Bonds, Ties Up With Aviva Life

Canara Bank plans to raise Rs 500 crore as Tier II capital through issuance of bonds to shore up its capital adequacy ratio (CAR) to 12 per cent, from the existing 11.89 per cent.

At the same time it expects to earn a fee-based income of Rs 20-25 crore from the bancassurance arrangement that has commenced initially with Aviva Life Insurance.

Even as a number of banks have decided to stall their Tier II issues on account of the high market yields, Canara Bank has decided to come to the market in next few days, with a bond issue having a tenor of 7-8 years and a greenshoe option of Rs 100 crore.

 

Canara Bank chairman and managing director R V Shastri was speaking to reporters in Mumbai today after launching the sale of Aviva Life