Indian Overseas Bank (IOB) is planning to raise Rs 500 crore via the sale of Tier-II bonds, the Chennai-based state-run lender said in a statement on July 9. The bonds have been rated 'A+/Stable' by CRISIL Ratings.
In May, IOB had obtained board approval to raise up to Rs 1,500 crore through the issuance of Basel-III compliant bonds in the current financial year to shore up its Tier-II capital.
At the end of March 2019, the bank's Tier-II capital stood at 2.36 percent, slightly above the regulatory requirement of 2 percent. Its Tier-I stood at 7.85 percent whereas the total capital adequacy ratio was at 10.21 percent.
IOB, along with five other state-run lenders, is still under the banking regulator's Prompt Corrective Action (PCA) framework that restricts various functions of the bank, including lending and branch expansion.
In December, IOB had raised Rs 300 crore via Tier-II bonds with a coupon rate of 11.70 percent per annum, the tenor of 10 years and call option after five years.
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