IDBI Bank raises Rs 900 crore via Basel-III compliant bonds

Public lender IDBI Bank on Saturday said it has raised Rs 900 crore by way of issuing Basel-III compliant tier-II bonds.

"IDBI Bank mobilised Rs 900 crore today through issue of Basel-III compliant tier-II bonds on private placement basis to strengthen the bank's capital adequacy," the bank said in a regulatory filing on Saturday.

The instrument -- IDBI Omni Tier-II 2015-16 series-II -- carries a coupon rate of 8.62% per annum. The bond maturity date is January 2, 2026. Many banks have been raising money through tier-II bonds, in their run-up to full Basel-III compliance by March 2019.

The Basel-III norms have been introduced in the Indian banking system since 2013 in a phased manner, with an aim to improve and strengthen regulation, supervision and risk management within the banking sector.

A Fitch Ratings report in December had said banks in India will need about $140 billion to ensure full compliance with the Basel III norms by 2018-19.