Business

IIE DIGITAL DESK , May 26: Union Bank of India has announced plans to raise up to ₹8,000 crore through a combination of debt and equity instruments, in a move aimed at strengthening its capital base and supporting future business expansion.

The decision was approved by the bank’s board during a meeting held on Tuesday, according to official and regulatory updates. The fundraising plan includes a mix of equity capital and debt instruments, allowing the public sector lender to maintain regulatory capital adequacy while also supporting credit growth.

The overall plan, the bank has approved an equity capital raising component of up to ₹3,000 crore. This may be raised through multiple methods such as public issue, rights issue, qualified institutional placement (QIP), or other permitted routes depending on regulatory approvals and market conditions.

The remaining ₹5,000 crore is expected to be mobilized through debt instruments, including Basel III compliant Additional Tier 1 (AT1) and Tier 2 bonds. These instruments are designed to improve the bank’s long-term capital stability and meet regulatory requirements under the Basel framework.

The fundraising will be carried out in tranches, depending on market conditions, investor demand, and internal capital requirements. The bank has clarified that the total combined fundraising will not exceed the ₹8,000 crore limit approved by the board.

Market analysts believe this move aligns with broader trends in India’s banking sector, where several lenders have been actively strengthening balance sheets to support credit expansion, infrastructure lending, and retail loan growth.

This capital raise is also seen as part of Union Bank’s long-term strategy to improve financial resilience amid evolving regulatory expectations and competitive pressures in the banking sector.