Union Bank to raise Rs 1,400cr in 6 mnths

Union Bank to raise Rs 1,400cr in 6 mnths

BS Reporter / Mumbai October 11, 2006

Union Bank of India plans to mobilise Rs 1,400 crore of capital funds through bond issuances over the next five months. This follows Rs 300 crore of perpetual debt raised this week.

The bank has drawn up such a big capital raising plan to maintain its capital adequacy ratio (CAR) substantially above the mandatory 9% even after implementing the Basel II capital adequacy norms.

The bank requires capital funds not only to support credit growth, but also because it would need to provide nearly Rs 500 crore for operational risk under Basel II. Basel II is a new set of capital allocation norms for the banking sector requiring banks to provide capital for operational risks in addition to credit and market risks.

Union Bank