RBL Bank raises $100 million through issuance of Tier 2 notes

18 May 2022 , 01:50 PM

RBL Bank Limited has announced that it has completed its first issuance of Basel III compliant unsecured and subordinated Tier 2 Notes aggregating to US$ 100 million with a tenor of 117 months to United States International Development Finance Corporation (“DFC”), America’s development finance institution.

The Tier 2 issuance increases the Bank’s Total Capital Adequacy Ratio to 17.85%, enhancing the Bank’s overall capital adequacy.

DFC is America’s development finance institution, part of the United States Government, and provides debt financing, equity investments, feasibility studies, investment funds, political risk insurance and technical assistance. DFC investments adhere to high standards and respect the environment, human rights and worker rights. This is DFC’s first investment in Basel III compliant Tier 2 Notes in India.

Announcing the completion of the preferential issue, Rajeev Ahuja, MD & CEO (Interim), RBL Bank said, “We are pleased to have raised Tier 2 capital from an important investor such as the U.S. International Development Finance Corporation (DFC).

This capital raise has taken place at an important juncture in our organisational journey and is an endorsement of the Bank’s franchise and prospects. The investment will augment the Bank’s capital position as it seeks to continue expanding its geographic footprint and expansion in its chosen businesses.”

“DFC’s purchase of Tier 2 Notes from RBL Bank is an investment in financial inclusion in India,” said DFC CEO Scott Nathan. “Our investment will enable RBL Bank to expand its lending portfolio and improve access to financial services. DFC’s support will help micro-, small-, and medium-sized enterprises across India recover from the economic downturn caused by the COVID-19 pandemic.”

At around 1:56 PM, RBL Bank was trading at Rs118.80 apiece down by Rs1.9 or 1.57% on the BSE.