Oriental Bank of Commerce to raise Rs 500 cr via bonds

State-owned Oriental Bank of Commerce said it intends to raise Rs 500 cr by selling bonds.

“The Bank intends to raise Tier 1 Capital through Private Placement of Basel III Compliant Additional Tier 1 Bonds of Rs.10,00,000 each at par aggregating to Rs.500 crore with an option to retain over-subscription of up to Rs.500 crore,” it said.

The proposed Bonds Issue has been rated as ‘A (Hyb.)’ with Negative Outlook by ICRA and ‘A’ with Negative Outlook by CARE, it added.

“The details of the Issue shall be informed in due course.”

OBC is one of the banks that has been hit hard by the steep increase in non-performing assets, or bad loans.

Banks in India have been raising more money to deal with the increase in NPA.

OBC was founded by Rai Bahadur Lala Sohan Lal, the first Chairman of the Bank, in 1943 in Lahore.

Within four years of its coming into existence, OBC had to face Partition. The bank had to close down its branches in the newly formed Pakistan and shift its registered office from Lahore to Amritsar.