Union Bank of India has approved a major fund-raising plan through long-term bonds and green bonds. The decision was taken during the meeting of the Committee of Directors for Fund Raising (Non-Capital) held on March 16, 2026.
The bank informed that the committee approved the issuance of long-term bonds worth up to ₹20,000 crore. These bonds will be issued in one or more tranches and the funds will mainly be used to support infrastructure development and affordable housing projects in India.
📘 Explainer: Types of Bonds Mentioned in the Union Bank Fund Raising Plan
1. Long-Term Bonds
Long-term bonds are debt instruments issued by banks or companies to raise money for a long period, usually 10 years or more. Investors who buy these bonds receive fixed interest payments. Banks often use funds raised through long-term bonds to finance infrastructure projects, housing loans, and other long-duration investments.
2. Green Bonds
Green bonds are special bonds used to raise money for environmentally friendly projects. The funds are typically used for renewable energy, clean transportation, pollution control, water management, and other climate-related initiatives.
3. Sustainable Bonds
Sustainable bonds are broader than green bonds. The money raised through these bonds can be used for both environmental and social projects such as affordable housing, healthcare, education, and sustainable infrastructure.
4. Green Shoe Option
The green shoe option allows the issuer to raise additional funds beyond the base issue if there is strong demand from investors. For example, if the base bond issue is ₹3,000 crore, the issuer can increase the size of the issue by using the green shoe option.
As part of this plan, the bank may raise ₹7,500 crore before March 31, 2026. This includes a base issue of ₹3,000 crore and a green shoe option of ₹4,500 crore. The bonds will have a tenure of 10 years.
In addition to this, the committee also approved the issuance of Green Bonds or Sustainable Bonds worth up to ₹5,000 crore. These bonds will also be issued in multiple tranches and will support projects related to sustainability and environmental development.
-
-
-
-
-
-
-
-
-
-
-
-
