Union Bank has raised Rs 1,500 crore by issuing Basel III compliant bonds to investors The bank has allotted unsecured, subordinated, non-convertible, taxable, perpetual, fully paid-up Basel III compliant additional tier-I bonds in the nature of debentures, aggregating to Rs 1,500 crore The bonds are eligible for inclusion in the tier-I capital of the bank To comply with Basel-III capital regulations, banks globally need to improve and strengthen their capital planning processes These norms are being implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks.

Tier-I capital is the core capital of a bank’s reserves and it is primarily used to fund business activities. Banks are required to hold certain levels of tier 1 and tier 2 capital as reserves so that they can absorb large losses without threatening their stability Shares of Union Bank of India closed at Rs 41 apiece on BSE, up 1.99 per cent from the previous close.

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