Banks are on a fundraising spree as economy shows signs of stability


Banks are on a fundraising spree as economy shows signs of stability : Rashtra News

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With steady economic revival and prospect of higher demand, banks are readying themselves for future business growth.

State-owned Bank of Maharashtra raised Rs 290 crore in Basel III compliant Additional Tier 1 (AT1) bonds of Rs 290 crores at 8.75 per cent. The lender completed the fundraising on Wednesday while Punjab National Bank is planning to raise capital soon in either AT1 bonds or tier 2 bonds or in a combination of both.

Uco Bank raised Rs 400 crore earlier in the week in tier 2 bonds. Canara Bank has raised Rs 1,000 crore in AT1 bonds in the first week of this month at 8.07% rate.

The fund will support the business growth of the bank, Bank of Maharashtra said in a regulatory filing to stock exchanges Thursday.

“The issue garnered overwhelming response from investors with bids of Rs 1055 crores received against a base issue size of Rs 250 crores, which is an indicator of the trust the investors place on the bank,” it said.

“The Indian economy steadied in February 2022 after some moderation of pace in the preceding month when the third wave was at its peak… Economy gaining traction has helped in rebuilding consumer confidence,” RBI said in its report on the state of the economy.

The Indian economy clocked a growth of 8.9% in 2021-22, as per the second advance estimates of national income released by the National Statistical Office on February 28.

Meanwhile, the board of PNB is scheduled to meet on March 29 to consider and approve the proposal for raising of capital in one or more tranches for FY23.

Uco Bank raised the fund at 8.51% rate for 10 years.

Despite steady progress on the domestic front and its strong macroeconomic fundamentals, the unfolding global developments pose downside risks to India’s economy in terms of spillovers, RBI said in the report.

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( News Source :Except for the headline, this story has not been edited by Rashtra News staff and is published from a feed.)

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