State-run banks aim to raise approximately Rs 55,000 crore through bond sales to bolster their core capital.

Public sector banks in India are planning to raise Rs 54,800 crore through additional tier-1 (AT-1) and tier-2 bond issues in the remaining fiscal year to strengthen their regulatory capital. They have already raised Rs 31,500 crore, with State Bank of India (SBI) and Canara Bank issuing AT-1 bonds worth Rs 5,000 crore and Rs 3,000 crore, respectively. Other banks, such as SBI, Punjab National Bank, Canara Bank, Bank of Baroda, and Bank of India, aim to raise between Rs 4,000 crore to Rs 10,000 crore. The union finance ministry needs to give its approval for these fundraising plans. The fund-raising is aimed at improving the banks’ core capital instruments to meet Basel III norms. AT-1 bonds, which have no fixed maturity date, are considered riskier, while tier-2 bonds, with fixed maturity terms, are less risky. The year so far has seen Rs 23,500 crore raised through tier-2 bond issuances, a 5% increase from the previous fiscal year’s total. If successful, the banks will have raised 37% more funds than last year, reaching a total of Rs 39,880 crore.