Central Bank of India on Friday said it will raise up to ₹500 crore by issuing Basel III compliant bonds.
The board of directors of the bank at its meeting on December 11, 2020, considered and approved the proposal for raising of capital funds up to Rs 500 crore.
About Company
Central Bank of India, a government-owned bank, is one of the oldest and largest commercial banks in India.
It is based in Mumbai which is the financial capital of India and capital city of state of Maharashtra.
It is one of twelve public sector banks in India to get recapitalised in 2009.
Nature of Bond
The fund will be raised by issuing non-convertible redeemable unsecured Basel III compliant tier 2 bonds in the nature of promissory notes.
What is Basel lll ?
Basel-III compliant bonds have both higher capital requirement and loss-absorption features compared with Basel II.
The Basel-III regulations are aimed to enhance the quality and quantity of capital held by banks.
What is Promissory Note?
Promissory notes are debt instruments with a promise by the issuer to repay the lender the amount with interest.
It allows companies or individuals to get funds other than banks.
Company’s Performance
Central Bank of India reported over 20% rise in its net profit at ₹161 crore for the second quarter ended 30 September.
Stock Market Impact
Shares of Central Bank of India closed 0.53 per cent down at Rs 14.88 apiece on the BSE on Friday.
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