Banks raising Rs 2,660 cr through bonds to increase CAR

Other banks which went for private placements includes Syndicate Bank (Rs 60 crore), Vijaya Bank (Rs 60 crore), Allahabad Bank (Rs 125 crore), Centurion Bank (Rs 75 crore), Global Trust Bank (Rs 75 crore) and Standard Chartered Bank (Rs 195 crore).

Coupon rate on these bonds ranged between 12.95 per cent to 10.8 per cent with tenures between 63 and 120 months.

"Raising of bonds through private placement is a normal phenomenon by banks, but this time there has been rush to meet the RBI norm of nine per cent CAR by March 2000," a top official of a bank said.

They said some of the banks, specially the public sector banks, had earlier announced to raise the capital through equity issues but were not able to hit the primary market.

Syndicate Bank, which raised the tier-I capital in the first half of the current fiscal raised the tier-II capital to remain over the stipulated nine per cent mark.

According to the Centre for Monitoring Indian Economy data, some of the banks which were falling short of the nine per cent mark included Standard Chartered Bank (8.3 per cent) and Centurion Bank (8.45 per cent).

Syndicate Bank’s CAR was marginally above the nine per cent mark at 9.57 per cent.