New Delhi: The state-owned Canara Bank Ltd on Friday said it plans to raise Rs.1,500 crore from bonds to augment its capital base.The bank has decided to raise additional capital of Rs.1,500 crore through the issue of Basel-III complaint Tier-II bonds, Canara Bank said in a filing to the Bombay Stock Exchange (BSE).This capital raising would be over and above Rs.500 crore that the government has decided to infuse in the bank before March 2014.
In order to take shareholders approval for issuance of preference shares to the government, the bank will hold an extraordinary general meeting on 30 December.
Capital infusion by the government has been done with the twin objective of adequately meeting the credit requirement of the productive sectors as well as to maintain regulatory capital adequacy ratios in public sector banks (PSBs). The government's infusion in PSBs is in addition to their internally generated capital to enable the banks to maintain a comfortable level of Tier-I, or equity, capital. An amount of Rs.12,517 crore was infused in 13 PSBs during 2012-13. This fiscal's infusion by the government is pegged at Rs.14,000 crore.