India’s largest lender issues Basel III-compliant perpetual bonds at 7.75% coupon rate
New Delhi (Economy India):India’s largest public sector lender, State Bank of India (SBI), has successfully raised ₹4,691 crore through the issuance of Basel III-compliant Additional Tier-1 (AT-1) bonds, strengthening its capital base to support future business expansion.
The bank said this is its first AT-1 bond issuance in the current financial year (FY2026-27). The bonds carry a coupon rate of 7.75% and are designed to enhance SBI’s capital adequacy while supporting lending growth.
Perpetual Bonds with Five-Year Call Option
According to SBI, the AT-1 bonds are perpetual in nature, meaning they do not have a fixed maturity date. However, the bank has the option to redeem (call) these bonds after five years, and on every anniversary thereafter, subject to regulatory approvals.
The proceeds from the bond issuance will be used to strengthen the bank’s capital position and fund its expanding business operations.
| Particulars | Details |
|---|---|
| Bank | State Bank of India (SBI) |
| Amount Raised | ₹4,691 crore |
| Instrument | Basel III Additional Tier-1 (AT-1) Bonds |
| Coupon Rate | 7.75% |
| Nature | Perpetual Bonds |
| Call Option | After 5 years and every anniversary thereafter |
| Purpose | Funding business growth and strengthening capital base |
Strengthening Capital Base
Additional Tier-1 (AT-1) bonds form an important component of banks’ regulatory capital under the Basel III framework. These instruments help banks maintain adequate capital buffers while supporting credit growth without diluting equity shareholders.
SBI’s latest fundraising reflects continued investor confidence in the country’s largest lender amid robust credit demand.
(Economy India)
