Bank of India redeems ₹1,800 crore Tier II bonds via call option
- Bank of India redeemed ₹1,800 crore worth of 7.14% Tier II Bonds Series XV
- Redemption executed via call option exercise on September 30, 2026
- Broken period interest of ₹64,08,39,453 paid alongside principal
- Outstanding amount reduced to Nil following full redemption
*this image is generated using AI for illustrative purposes only.
Bank of India has completed the full redemption of its 7.14% Tier II Bonds Series XV, amounting to ₹1,800 crore, on September 30, 2026. The bank exercised its call option to retire the debt instrument entirely.
The repayment included the principal amount along with broken period interest paid to bondholders. This action aligns with the bank's capital management strategy, effectively removing this specific tranche from its outstanding liabilities.
Redemption details
The redemption was executed pursuant to Regulation 57 of the SEBI (LODR) Regulations, 2015. The bank confirmed that the actual date of redemption coincided with the due date, ensuring no delay in settlement.
| Particulars | Details |
|---|---|
| Bond Series | Tier II Bonds Series XV |
| Coupon Rate | 7.14% |
| Amount Redeemed | ₹1,800 crore |
| Redemption Type | Full |
| Reason for Redemption | Call Option Exercised |
| Redemption Date | September 30, 2026 |
| Outstanding Amount | Nil |
Interest payment specifics
In addition to the principal repayment, Bank of India disbursed broken period interest totaling ₹64,08,39,453. The last regular interest payment on these bonds was made on April 2, 2026. The final payout ensures that all accrued obligations to the 18,000 redeemed units are settled in full.
What the numbers show
The exercise of the call option at maturity indicates a planned capital restructuring rather than an early retirement driven by distress or opportunistic refinancing. Since the redemption date matched the maturity date, the bank likely determined that the cost of maintaining this Tier II capital segment was no longer optimal compared to potential new issuance or internal accruals. The complete elimination of the outstanding balance simplifies the bank's debt profile for the upcoming fiscal periods.
Historical Stock Returns for Bank of India
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.55% | -4.51% | -9.15% | -9.77% | +10.15% | +137.44% |
How will the removal of ₹1,800 crore in Tier II capital impact Bank of India's overall Capital Adequacy Ratio (CAR) and regulatory buffer margins?
What are Bank of India's specific plans for replacing the redeemed Tier II capital, and how might current market yields influence the pricing of any new issuance?
How does this redemption align with the bank's broader strategy to optimize its cost of funds amid changing interest rate cycles in India?
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