New Delhi: State-owned Corporation Bank has launched an issue of Tier I bonds to raise Rs 500 crore for funding its growth plans. The fund would be raised from unsecured subordinated Additional Tier I Basel III compliant non-convertible taxable bonds, a senior official of the bank said.
Under the Basel-III norms, AT-1 bonds come with loss absorbency features, meaning that in case of stress, banks can write off such investments or convert them into common equity if approved by the RBI. The bond issue, which opened on January 20, carries a coupon rate of 9.51 per cent have a face value of Rs 10 lakh.
The issue would close on February 5 and bonds would be issued on February 6. AT-1 bonds, which qualify as core or equity capital, are one of the means of raising capital by public sector banks that require Rs 2.40 lakh crore by March 2019 to meet global norms on capital adequacy (Basel III). The bonds would be listed on the National Stock Exchange. Meanwhile, the bank has bagged MSME Banking Excellence Awards.
It has bagged two awards under the categories 'Best MSME Bank Award for Other Bank (Winner)' and 'Best Bank Award (Runner Up)'. The award was received by S R Bansal, Chairman and Managing Director of the bank at the benign hands of Kalraj Mishra, Micro, Small & Medium Enterprises Minister.