Canara Bank plans to issue up to ₹4,500 crore in Basel III-compliant Additional Tier I bonds on September 16, as part of a larger ₹8,500 crore fundraising plan to support its expansion across various lending segments and strengthen its capital base.
Canara Bank plans to raise up to ₹4,500 crore through Basel III-compliant Additional Tier I bonds on Wednesday, September 16, as the state-owned lender presses ahead with a broader capital plan approved earlier this year. The bank said the notes will be perpetual instruments with a call option after five years, subject to regulatory clearance, and that the issue has been rated AA+ with a stable outlook by ICRA Ratings and India Ratings.
The move forms part of a larger fundraising framework of as much as ₹8,500 crore for the 2026-27 financial year, split between ₹4,500 crore of AT1 bonds and ₹4,000 crore of Tier 2 bonds, according to disclosures cited by business publication reports. Additional Tier 1 securities are designed to bolster a bank’s core capital under Basel III rules, but they carry higher risk for investors because payments can be deferred and principal may be written off in stress scenarios.
Canara Bank said the latest capital raise comes as it continues to expand across retail, agriculture, MSME and corporate lending, with total business on track to reach ₹30 trillion. The lender also highlighted its participation in the Reserve Bank of India’s FCNR(B) swap facility, under which it mobilised $5.80 billion, portraying that as evidence of the bank’s domestic and international reach.
The timing also follows a separate capital-management step involving older AT1 securities. Market reports have said the bank plans to exercise call options on ₹4,000 crore of Basel III-compliant AT1 bonds issued in late 2021 and early 2022, subject to RBI approval. Those instruments carry coupons of 8.05% to 8.40%, higher than the expected 7.85% to 7.90% range for the new issue, suggesting the lender may be seeking to refinance at a lower cost if market conditions hold.
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