New Delhi: State-owned Bank of Maharashtra said in a regulatory filing on Tuesday that the bank will pay an annual interest of Rs 46 crores on BASEL III Compliant Tier II Bond. The issue size was Rs 500 crores and the record date for interest payment was June 12, said the filing.
The payment of Rs 46 crore interest on its BASEL III Tier II bond by Bank of Maharashtra implies that the bank has fulfilled its obligation to pay interest on this specific type of bond issued under the Basel III framework. Basel III refers to a set of international banking regulations developed by the Basel Committee on Banking Supervision. These regulations aim to strengthen the banking sector's resilience and stability by imposing certain capital and liquidity requirements on banks.
Tier II capital is a component of a bank's capital structure, representing supplementary capital that provides a buffer against losses. Banks issue Tier II bonds to raise funds from investors, and these bonds typically have a fixed maturity period and pay periodic interest.
By paying Rs 46 crore interest on its BASEL III Tier II bond, the Bank of Maharashtra is meeting its financial obligations to the bondholders. This interest payment represents the compensation that the bank provides to the bondholders for investing in the bond.
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