Canara Bank Becomes First This Year To Tap The AT1 Segment With A Giant Rs 3,500 Cr Issue

Canara Bank launched a Rs. 3500 crore issue to bolster its capital base and support future expansion goals, making it the first bank in the current fiscal year to make use of the Additional Tier-1 (AT1) bond market.

The issue is scheduled on Friday 28th of November 2025, on the Electronic Bidding platform of NSE.

In response to significant investor demand, Canara Bank is raising up to Rs. 3500 crore through Basel III-compliant AT1 bonds. The issue is structured around a base component of Rs. 1000 crore and a green shoe option of Rs. 2500 crore. According to market reports, this is perhaps the first AT1 that any bank in the domestic market has issued in the current fiscal year, signifying a significant opening of the Tier-1 segment following a prolonged lull.

"The AT1 bond issue forms part of the broader capital raising programme of up to Rs. 9500 crore for the year, combining Tier-1 and Tier-2 instruments to bolster regulatory capital ratios under Basel III norms," said Canara Bank in a statement.

A number of regulatory modifications have been released by Canara Bank, including an adjustment to its Marginal Cost of Funds Based Lending Rate (MCLR) which is in force from November 12, 2025, with minor cuts throughout tenors, such as the one-year MCLR being dropped from 8.75% to 8.70%.

The bank also disclosed that the Reserve Bank of India has imposed a monetary penalty of Rs 4,35,550 for shortages and deficiencies observed in its currency chest during an inspection conducted in October 2025, though the impact on operations is not significant.

Canara Bank also announced significant changes to its senior management: on November 24, 2025, Shri Sunil Kumar Chugh, a seasoned banker with over 30 years of experience across major public sector banks, will take over as Executive Director of Canara Bank, bringing with him extensive leadership and credit management expertise. The Central Government also appointed Shri Prabhat Kiran, Chief General Manager, as Executive Director of Bank of Maharashtra for a three-year term.

As of November 6, 2025, Canara Bank has declared that Care Ratings Limited (CareEdge Ratings) has issued and reaffirmed multiple credit ratings for its different bond instruments. The bank obtained a CARE AA+ (Stable) rating for its newly proposed Rs 3,500 crore Tier I bonds, while its existing Infrastructure Bonds worth Rs 20,000 crore and Tier II Bonds totalling Rs 7,250 crore have been reaffirmed at the highest rating of CARE AAA (Stable).

The ratings reflect Canara Bank's strong franchise, majority Government of India ownership (62.93% as of September 30, 2025), a wide network of 9,948 branches, healthy capitalization with a CAR of 16.20% and CET I ratio of 12.21%, and consistent profitability marked by Rs 17,027 crore net profit in FY25 and Rs 9,526 crore in H1FY26.

As of September 30, 2025, CareEdge reported improvements in asset quality, as indicated by a high provision coverage of 93.59% and a Gross NPA ratio of 2.35% and Net NPA of 0.54%. The bank has a good liquidity position thanks to excellent LCR and NSFR levels, significant SLR buffers, and a comparatively low CASA ratio of 28.02%.