State Bank of India (SBI) has successfully raised rupees 7,500 crore (approximately $900 million) through the issuance of non-convertible, taxable, redeemable, subordinated, unsecured, fully paid-up Basel III compliant Tier 2 bonds.
The sale of the bond, which took place on October 17, 2025, was a success. SBI’s initial plan was to raise rupees 5,000 crore. However, the offer was “oversubscribed.” A total of 101 different investors, including pensions funds, mutual funds, and other banks, offered to invest nearly three times the base amount. Seeing the increase in demand, SBI decided to accept the full rupees 7,500 crore.
What are these bonds?
Bonds are known as debt instruments; this Basel III bond is no different. These bonds are issued by banks to meet the capital requirements of the global Base III regulatory framework. In this way, banks raise capital to include them in their crore capital reserves and absorb losses and withstand financial stress.
These bonds are of two types:
Tier 1: These are more permanent form of capital and have higher-loss absorbing capacity.
Tier 2: These are supplementary capital and are considered to be subordinate to other debts in an event of liquidation.
The amount (rupees 7,500 crore) raised by SBI would be added to its Tier 2 type. This makes the bank more stable, and gets itself better prepared for any upcoming economic challenges.
Key details of the bond sale:
Total amount: rupees 7,500 crore
Interest rate (coupon): 6.93% per year
Maturity: These are 10-year bonds, meaning SBI will pay the money back in October 2035.
Safety ratings: These bonds have been rated “AAA” by credit agencies. This is the highest possible rating, which means these bonds are safe and secure to invest in.
Interest payout: Interest would be paid annually on October 20 every year until redemption.
Call option: SBI has the right to pay back the bonds early, any time after five years.
This is the first time a public sector bank in India has raised Tiecapital in FY26.
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