The Bank of Baroda on Friday said that it has raised Rs 764 crore by issuing Basel III compliant bonds through private placement. The bank stated in a regulatory filing that the bank has issued and allotted an unsecured rated listed subordinated non-convertible fully paid-up Basel III additional tier 1 perpetual bond. The bond’s coupon rate is 8.25%. Perpetual bonds have no maturity date, so they can be treated as equity rather than debt.
The public sector bank stated that the issuance of the bond opened on July 15 and was closed on the same day. On July 17, a total of 18 allotments were done . To comply with the Basel III Capital Regulations, banks need to improve and strengthen their capital planning process.
These regulations are implemented to alleviate potential pressure on asset quality and concerns about the impact on bank performance and profitability. Since April 1, 2013, the Indian banking system has implemented Basel III standards in phases. It is expected that banks will fully implement these regulations by March 2020.
