Bank of Baroda raises Rs 920 crore via Basel III-compliant bonds

Public sector lender Bank of Baroda has raised Rs 920 crore by issuing Basel III-compliant bonds on private placement basis. The state-owned lender has issued a total of 9,200 bonds worth Rs 920 crore, Bank of Baroda said on Friday.

The issue opened on Thursday on NSE's Electronic Debt Bidding (EDB) platform and closed on the same day. The issue was allotted to a total of 11 allottees through private placement of bonds, the bank said.

"A 7.44 per cent unsecured rated listed subordinated fully paid up additional tier I Basel III compliant non-convertible perpetual taxable bonds, Series XXII' were allotted to 11 allottees on January 2, 2020," Bank of Baroda said in a filing to the Bombay Stock Exchange.

Last month, the bank had raised Rs 1,747 crore by issuing Basel III compliant bonds on a private placement basis.

Also Read: Bank of Baroda raises Rs 1,747 crore by issuing Basel III compliant bonds

In a bid to comply with Basel-III capital regulations, banks need to improve and strengthen their capital planning processes. Banks are required to maintain a minimum Pillar 1 Capital to Risk-weighted Assets Ratio (CRAR) of 9 per cent on an on-going basis (other than capital conservation buffer and countercyclical capital buffer).

The Basel III capital regulations, which are being implemented in India with effect from 1 April 2013, intend to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks. The banks are expected to fully implement these norms by March 2020.

The bank also informed the exchange that a meeting of the Capital Raising Committee (CRC) of whole time directors of the bank will be held on 8 January to consider raising of capital funds through issue of capital debt instruments.

Also Read: SEBI tells LIC, SBI, BoB to cut stake in UTI AMC below 10% or face strict action

In a separate development, Bank of Baroda on Thursday entered into a co-lending agreement with JM Financial Home Loans Ltd (JMFHL), the housing finance arm of JM Financial Group, to offer loans to homebuyers.

Meanwhile, shares of Bank of Baroda closed Friday's trade at Rs 100.85 apiece, up 3.40 per cent, on the Bombay Stock Exchange.

By Chitranjan Kumar