PNB, BoB, Syndicate to raise Rs 7,000 crore via AT-1 bonds

Banks in India raised Rs 45,290 crore in capital by issuing AT-1 bonds in 2016-17: ICRA

Three government-owned lenders — Bank of Baroda (BoB), Punjab National Bank (PNB) and Syndicate Bank — are raising a total of Rs 7,000 crore through Tier-I bonds, to bolster their Capital Adequacy Ratio (CAR).

Delhi-based PNB is raising up to Rs 3,000 crore, Mumbai-based BoB will issue AT-1 bonds for Rs 3,000 crore and Manipal-based Syndicate will raise about Rs 1,000 crore.

Under Basel-III norms, a bank’s capital comprises two tiers. Tier-I or core capital has two components — common equity (CET-1) and hybrid capital, combining features of equity and debt, termed additional Tier-I capital (AT-1). Tier-II is supplementary capital.