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The board of directors approved the fundraising plan at its meeting held on March 22, 2022, the bank said in a regulatory filing.
The lender said it will issue Basel III compliant unsecured tier-2 subordinated bonds in the nature of debentures with a base issue size of Rs 150 crore and a greenshoe option to retain oversubscription up to Rs 150 crore, aggregating up to Rs 300 crore in one or more tranches.
The bonds will be issued on a private placement basis to eligible investors, it added.
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To comply with Basel-III capital regulations, banks globally need to improve and strengthen their capital planning processes.
These norms are being implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks.
The Indian banking system has been implementing Basel III standards in phases since April 1, 2013.