Mumbai: The State Bank of India on Wednesday said it has received board approval for raising Rs 8,000 crore to meet Basel III capital adequacy norms through various instruments, including masala bonds.
The state-run lender said it has time till March 2018 to raise the funds required to meet the Basel III capital adequacy norms put in place to guard against a repeat of the situation following the 2008 US financial crisis.
"The Central Board at its meeting held today accorded approval to raise additional tier 1 (AT 1) capital by way of issuance of Basel III compliant debt instruments in USD and/or INR to the tune of Rs 8,000 crore from domestic/international market including masala bonds," the SBI said in a stock exchange filing.
Rupee denominated debt instruments that can be floated in overseas markets only to raise capital are known as Masala Bonds.
According to estimates earlier, public sector banks would need additional capital of up to Rs 2,40,000 crore by 2018 to become Basel III compliant.
Banks in India have to comply with these norms of the Basel Committee on Banking Supervision by March 2019, which is three months later than the internationally agreed deadline of January 2019.