State Bank of India (SBI), the country's largest lender, on Monday said it has raised Rs 7,000 crore by issuing Basel III compliant bonds. The public sector lender has allotted 70,000 Basel III compliant bonds of face value of Rs 10 lakh each, bearing an interest rate of 6.24 per cent per annum payable annually for a tenor of 10 years with call option after 5 years and on anniversary dates thereafter. The allotment of bonds to the subscribers took place today.
"The committee of directors for capital raising at its meeting of held today on September 21, 2020 accorded its approval to allot 70,000 Basel III compliant non-convertible, taxable, redeemable...debt instruments in the nature of debentures aggregating to Rs 7,000 crore, to bond subscribers," SBI said in a filing to the Bombay Stock Exchange.
The bonds qualify as tier II capital of the bank, and has face value of Rs 10 lakh each, bearing coupon rate of 6.24 per cent per annum payable annually for a tenor of 10 years, it said.
There is call option after 5 years and on anniversary thereafter, it added. Call option means the issuer of the bonds can call back the bonds before the maturity date by paying back the principal amount to investors.
Last month, SBI had raised Rs 8,931 crore by allotting 89,310 Basel III-compliant debt instruments to bond subscribers.
Under the globally accepted Basel-III capital regulations, banks need to improve and strengthen their capital planning processes. Basel III norms are being implemented in phases since 2013 by Indian banks to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks. The banks have to comply with these regulations by end of September 2020.
In a separate development, SBI today launched online portal for restructuring of retail loans with an aim to provide relief to its retail borrowers from the adverse impact of COVID-19. Retail borrowers can check their eligibility instantaneously for loan recasts by providing income details. Under the resolution framework framed by RBI, certain borrowers are eligible whose loan accounts were classified as standard and not default for equal to or more than 30 days as on March 1, 2020, and their incomes are impacted by COVID-19.
Meanwhile, SBI stock ended day's trade at Rs 185.80 apiece, down 3.53 per cent, from previous close on BSE.
By Chitranjan Kumar