Mumbai: Country’s largest bank State Bank of India (SBI) will issue bonds for retail investors up to Rs1,000 crore, the bank said in a notification to the Bombay Stock Exchange on Tuesday.
The bank’s board approved the issuance of Rs500 crore of bonds “with an option to retain 100% over subscription,” the notification said. The bond will be used to shore up the bank’s tier-II capital.
The bank did not give any further details about the proposed bond’s maturity profile or interest rate. SBI officials were not available for comments.
SBI chairman O.P. Bhatt, in May, had said his bank would issue retail bonds worth Rs200 crore in the first half of the year.
According to top officials of SBI quoted in media at that time, including in Mint, the bond would have a maturity of 10-15 years. The plan is to raise up to Rs5,000 crore in tranches. SBI had earlier tapped the retail market by issuing a floating rate bond of 10-year maturity to raise Rs1,500 crore in 1994. However, the bonds were redeemed in 1998 when the bank exercised the call option after five years.