New Delhi, Sep 21 (PTI) Public sector lender State Bank of India on Wednesday said it has raised Rs 4,000 crore by issuing bonds at a coupon rate of 7.57 per cent.

The fund has been raised by issuing Basel III compliant tier II bonds.

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Country's largest lender in terms of asset size, deposits and customer base said the bond issue witnessed an overwhelming response from investors, attracting bids worth Rs 9,647 crore, which was oversubscribed by about 5 times against the base issue size of Rs 2,000 crore.

"This is an indicator of the trust the investors place in the country's largest bank. Based on the response, the bank has decided to accept Rs 4,000 crore at a coupon rate of 7.57 per cent," SBI said in a release.

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The coupon will be payable annually for a tenor of 15 years with a call option after 10 years and on anniversary dates, thereafter.

This represents a spread of 14 bps (basis points) -- one basis points is 100th of a percentage point -- over 10-year Government securities (G-sec), SBI said.

The 10-year SDL (state development loans) cut-off was 7.69 per cent annualised on September 20, 2022.

SBI said it has AAA (stable) credit rating from domestic credit rating agencies for these instruments.

Under the Basel-III capital regulations, banks globally need to improve and strengthen their capital planning processes.

These norms are implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)