State Bank of India raises Rs 4,000 crore via tier-II bonds

The country's largest lender State Bank of India (SBI) on Thursday said it has raised Rs 4,000 crore by issuing tier-II bonds on private placement basis under the Basel-III norms.

"The bank on December 23, 2015, issued 40,000 Basel-III compliant tier-ll bonds in the nature of debentures of face value of Rs 10,00,000 each at par with 10-year tenure, bearing 8.33% per annum coupon and with call option after five years, aggregating to Rs 4,000 crore on private placement basis," SBI said in a filing to the BSE.

However, the State Bank of India did not elaborate on the usage of proceeds.

The Public Sector Unit (PSU) lender on Monday had said it was planning to raise up to Rs 12,000 crore by issuing tier-II bonds on private placement basis.

The Committee of Directors' authorised the bank to raise up to Rs 12,000 crore by way of "issue of Basel-III compliant tier-II bonds, at par, through private placement," it had said.

According to a Fitch Ratings report, Indian banks need $140 billion (nearly Rs 9,27,360 crore) capital to ensure full compliance with the Basel-III norms by 2018-19.The Basel-III norms are aimed at bolstering banks' resilience. Basel-III capital regulations are being implemented in India with effect from April 1, 2013, in a phased manner.

At 1312 hours, the shares of SBI were trading down 0.43% or Rs 1.00 at Rs 228.90 per scrip intraday on BSE.