Bank of India Boosts Capital with Tier II Bond Issue

The State-owned Bank of India raised Rs 2,500 crore through Basel III-compliant Tier II bonds, aimed at funding business growth. The bonds feature a 7.28% annual coupon rate. The base issue was Rs 1,000 crore, expandable by Rs 1,500 crore, following RBI guidelines for long-term capital enhancement.

The State-owned Bank of India (BoI) has successfully raised Rs 2,500 crore through Basel III-compliant Tier II bonds, a strategic move to bolster its business growth. The bonds offer a 7.28% annual coupon rate, according to an official statement released on Wednesday.

Originally set at a base size of Rs 1,000 crore, the bond issue included a green shoe option of an additional Rs 1,500 crore, providing flexibility and increased funding capacity for the bank. This capital injection aims to enhance the bank's overall capital structure in line with the Reserve Bank of India's guidelines.

Unlike project-specific financing, BoI intends to use the proceeds from this bond issue for regular business activities, strengthening its long-term resources without tying the funds to any particular project.

(With inputs from agencies.)