Canara Bank to raise Rs 1,000 crore through bonds

Canara Bank said on Thursday that it plans to raise Rs 1,000 crore from bonds to fund business growth.

The bond committee has decided to raise additional capital of Rs 1,000 crore through issue of Basel-III complaint Tier-II bonds, the state-owned lender said in a filing on the BSE.

In January, the bank had raised Rs 1,500 from bonds to enhance capital base.

The Bangalore-based bank also got capital infusion of Rs 500 crore from the government during the onoing fiscal year (2013-14). The fund support to Canara Bank was part of Rs 14,000 crore overall capital infusion plan for the public sector banks (PSBs).

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 PSBs.

The government's fund 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.

Finance Minister P Chidambaram had proposed infusion of Rs 11,200 crore in public sector banks to enhance their capital in the next financial year.

Shares in Canara Bank, on Thursday, ended at Rs 239.35 apiece on the BSE, down 2.76 per cent from the previous close.