Bank of India plans to raise Rs 5,000 crore through infrastructure bonds
The bank had previously raised Rs 5,000 crore through 10-year infrastructure bonds in July of this year at a coupon rate of 7.54%.
Bank of India plans to raise Rs 5,000 crore through infrastructure bonds
Bank of India plans to raise Rs 5,000 crore through the issuance of 10-year infrastructure bonds this week, according to sources. The issuance will consist of a base issue size of Rs 2,000 crore and an additional greenshoe option of Rs 3,000 crore.
The bank had previously raised Rs 5,000 crore through 10-year infrastructure bonds in July of this year at a coupon rate of 7.54%.
Public sector lenders are making the capital market to raise funds via infrastructure bonds, driven by credit growth needs amid challenges in deposit mobilization. Public sector banks, including State Bank of India (SBI), Bank of Baroda, Canara Bank, Bank of Maharashtra, Bank of India, and Indian Bank, have collectively raised substantial amounts through infrastructure bonds in the current financial year.
Join PSU Connect on WhatsApp now for quick updates! Click here
Read Also : Defense Stock, BEML surges over by 4.2%, here is price target for PSU stockAccording to sources, banks have raised Rs 74,256 crore via infrastructure bond issuances so far this financial year. Infrastructure bonds offer a significant advantage for banks, as the funds raised are exempt from regulatory reserve requirements such as statutory liquidity ratio (SLR) and cash reserve ratio (CRR).
Unlike funds raised through deposits—where banks must maintain 4.5% of the amount as CRR with the Reserve Bank of India (RBI) and invest approximately 18% in government securities to meet SLR obligations—proceeds from infrastructure bonds can be fully deployed for lending activities.
Additionally, the Bank of India plans to borrow Rs 2,500 crore in the next quarter through additional tier-I (AT-I) bonds to strengthen its capital base. Perpetual AT-I bonds include provisions that could impact interest payments if certain capital or earnings thresholds are breached. In extreme cases, these bonds may be converted into equity, reflecting their higher associated risks.
Read Also : Indian Overseas Bank to receive Rs 1,359-crore income tax refundNews Must Read
- BEML Ltd Secures Order for 50-Ton Trailer from Defence Ministry
- New CVO Nilabhra Sengupta takes charge at BEL
- Noida International Airport to boost connectivity and Ease of Living: PM Modi
- Sanjay Malhotra appointed as new Governor of RBI
- Defence PSU bags orders worth Rs.634 Crores since...
- MECL and CMPDIL discussed possible collaboration
- Brahmaputra Infra declared No Dividend this year
- Power Minister reviewed Power and Urban Development Sector in Andhra Pradesh
- Harish Duhan recommended for new CMD of SECL
- Punjab to have sufficient urea for rabi season said NFL