Central Bank of India Redeems Rs.500 Crore Basel III Tier II Bonds Ahead of Schedule
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The Central Bank of India has successfully redeemed ₹500 crore worth of Basel III Compliant Tier II Bonds (Series V) on May 20, 2025, ahead of their original maturity date. The bank exercised its call option, allowing it to repay both the principal and interest amount to bondholders before the scheduled maturity of May 20, 2030.
The move was officially communicated via a filing under Regulation 57(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Key Highlights
- ISIN: INE483A08031
- Total Redemption Amount: ₹500 crore
- Interest Paid: ₹7.69 crore (₹7,68,76,712)
- Date of Payment: May 20, 2025
- Interest Record Date: May 5, 2025
- Outstanding Bond Amount after Redemption: Nil
What Does This Mean?
Basel III Tier II bonds are debt instruments issued by banks to strengthen their capital base in line with international regulatory standards. These are long-term bonds, and in this case, they were initially set to mature in 2030. However, such bonds often include a call option, allowing the issuing bank to buy them back before maturity, usually after five years.
By exercising the call option, Central Bank of India:
- Paid back the principal amount of ₹500 crore to bondholders
- Cleared the final interest due
- Closed the bond series completely, as no further obligations remain
This decision signals the bank’s strong capital position and healthy liquidity, allowing it to retire debt early. It may also indicate that the bank found more cost-effective funding options or wanted to optimize its capital structure.
Why Is This Important?
Early redemption of bonds sends a positive signal to investors and markets. It reflects:
- Confidence in the bank’s financial strength
- A reduction in long-term debt obligations
- Efficient capital and interest cost management
Moreover, timely and full repayment enhances the bank’s reputation among institutional investors and reinforces trust in its debt servicing ability.
Official Confirmation
The bank’s Company Secretary and Compliance Officer, Chandrakant Bhagwat, confirmed the development and submitted the report to regulatory authorities and bond trustees, including IDBI Trusteeship Services Ltd.
Details of Interest Payment
| Sr.No. | Particulars | Details |
|---|---|---|
| 1 | ISIN | INE483A08031 |
| 2 | Issue Size | ₹500,00,00,000/- |
| 3 | Interest Amount to be Paid | ₹7,68,76,712/- |
| 4 | Frequency | Annually |
| 5 | Change in Frequency | NA |
| 6 | Details of Change | NA |
| 7 | Interest Payment Record Date | 05/05/2025 |
| 8 | Due Date for Interest Payment | 20/05/2025 |
| 9 | Actual Date of Interest Payment | 20/05/2025 |
| 10 | Amount of Interest Paid | ₹7,68,76,712/- |
| 11 | Date of Last Interest Payment | 20/03/2025 |
| 12 | Reason for Non-Payment/Delay | NA |
Details of Redemption (Principal) Payment
| Sr.No. | Particulars | Details |
|---|---|---|
| 1 | ISIN | INE483A08031 |
| 2 | Type of Redemption | Full |
| 3 | If Partial Redemption | NA |
| 4 | Redemption Basis | NA |
| 5 | Reason for Redemption | Call option exercised |
| 6 | Put Option Date | NA |
| 7 | Call Option Date | 20/05/2025 |
| 8 | Quantity Redeemed (NCDs) | 5000 |
| 9 | Due Date for Redemption/Maturity | 20/05/2030 |
| 10 | Actual Date of Redemption | 20/05/2025 |
| 11 | Amount Redeemed (Principal) | ₹500,00,00,000/- |
| 12 | Outstanding Amount | Nil |
| 13 | Date of Last Interest Payment | 20/03/2025 |
