Rajkiran Rai G, MD and CEO, Union Bank of India
Rajkiran Rai G, MD and CEO, Union Bank of India

State-owned Union Bank of India on Tuesday said it will raise up to Rs 1,000 crore from bonds to fund business growth.

"The bank is issuing Basel III compliant Tier II bonds in the nature of debentures aggregate issue size not exceeding Rs 1,000 crore, with a base issue size of up to Rs 500 crore and a Green Shoe option to retain oversubscription up to Rs 500 crore," it said in a BSE filing.

The bonds of face value of Rs 10 lakh each, bearing a coupon of 7.18 per cent per annum, will have maturity of 15 years, it said.

The bonds have fixed allotment date of November 26, 2020. The Basel-III capital regulations are globally accepted banking norms under which banks need to improve and strengthen their capital planning processes.

Basel-III norms are being implemented in phases since 2013 by Indian banks to mitigate concerns on potential stress on asset quality and consequential impact on performance and profitability of banks.

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