Canara Bank Approves ₹8,500 Cr Capital Raise via Basel III Bonds

Canara Bank's Board has approved a capital raising plan of up to ₹8,500 crore for FY27 through issuance of Basel III-compliant debt instruments. Structure: Additional Tier I (AT1) Bonds ₹4,500 Cr Perpetual capital; absorbs losses at trigger events; counts toward CET1 ratio Tier II Bonds ₹4,000 Cr Supplementary capital; 5-10 year tenor; enhances overall CRAR Key Conditions: Execution subject to market conditions, investor appetite, and requisite regulatory approvals (RBI, SEBI). Pricing and tenor to be determined at the time of issuance based on prevailing yield curves. Strategic Rationale: Regulatory Compliance: Strengthens Capital-to-Risk-Weighted Assets Ratio (CRAR) to meet RBI's Basel III norms and buffer requirements. Growth Support: Augments lending capacity for priority sectors (MSME, agriculture, infrastructure) without diluting equity. Funding Diversification: Accesses institutional investor base (mutual funds, insurers) beyond deposit mobilization. Outlook: Successful issuance at competitive spreads would signal market confidence in Canara Bank's asset quality and earnings trajectory. AT1 bonds typically carry higher coupons but offer tax-efficient capital; Tier II bonds provide longer-dated stability. $CANBK