Canara Bank exercises call option on ₹4,000 crore AT1 bonds
- Canara Bank exercises call option on ₹4,000 crore in Basel III AT1 bonds
- Redemption is subject to Reserve Bank of India approval
- Bonds carry interest rates between 8.05% and 8.40% per annum
- Record dates are set for October 2026 through February 2027
*this image is generated using AI for illustrative purposes only.
Canara Bank has decided to exercise the call option on its Basel III compliant Additional Tier I bonds with a total face value of ₹4,000 crore. The bank notified stock exchanges of this decision on September 4, 2026.
The redemption is subject to the approval of the Reserve Bank of India and other relevant regulatory authorities. The bonds carry interest rates ranging from 8.05% to 8.40% per annum.
Bond Details
The call option applies to three separate tranches of Additional Tier I (AT1) bonds issued in late 2021 and early 2022. The record dates for these instruments are scheduled for October and November 2026, with one tentative date for February 2027.
| ISIN | Instrument | Issued Amount | Interest Rate | Issue Date | Call Option Date | Record Date |
|---|---|---|---|---|---|---|
| INE476A08159 | BASEL III AT I | ₹1,000.00 crore | 8.07% p.a | March 4, 2022 | March 4, 2027 | February 17, 2027* |
| INE476A08134 | BASEL III AT I | ₹1,500.00 crore | 8.05% p.a | December 2, 2021 | December 2, 2026 | November 17, 2026 |
| INE476A08126 | BASEL III AT I | ₹1,500.00 crore | 8.40% p.a | October 25, 2021 | October 25, 2026 | October 9, 2026 |
*The record date for the first tranche is tentative and subject to confirmation.
Regulatory Context
This action follows previous intimations sent by the bank via letters dated January 14, 2026, and September 3, 2026. The exercise of the call option allows the bank to redeem these capital instruments before their final maturity, assuming regulatory clearance is granted.
Historical Stock Returns for Canara Bank
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.24% | -2.06% | -1.26% | -18.27% | +15.85% | +290.48% |
How will the redemption of ₹4,000 crore in AT1 bonds impact Canara Bank's liquidity position and capital adequacy ratios in the short term?
Will Canara Bank issue new Tier I instruments to replace the redeemed bonds, and if so, what interest rates might they offer given current market conditions?
What does this early redemption signal about Canara Bank's confidence in its future profitability and ability to absorb potential losses without external capital?
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