SBI to Become First Indian Bank to Issue Basel III-Compliant AT-1 Perpetual Bonds in 2026

State Bank of India (SBI) is set to become the first Indian bank in 2026 to issue Basel III-compliant Additional Tier-I (AT-1) Perpetual Bonds, marking a significant step towards strengthening its capital base. The country’s largest public sector bank plans to raise ₹5,000 crore through the bond issuance as part of its broader capital-raising strategy for the financial year.

SBI to Raise ₹5,000 Crore Through AT-1 Perpetual Bonds

SBI is expected to launch the ₹5,000 crore Basel III-compliant AT-1 Perpetual Bond issue within the next two weeks. The proposed bonds will include a five-year call option, allowing the bank to redeem the bonds after five years, subject to approval from the Reserve Bank of India (RBI) and other regulatory authorities.

The issuance forms part of SBI’s previously approved plan to raise up to ₹60,000 crore during the current financial year through various debt instruments.

Part of SBI’s ₹60,000 Crore Capital Raising Plan

In June 2026, the SBI Board approved a proposal to raise up to ₹60,000 crore through multiple debt instruments, including:

• Infrastructure Bonds
• Basel III-compliant Additional Tier-I (AT-1) Bonds
• Tier-II Bonds

The objective is to strengthen the bank’s capital position, support business expansion, and meet evolving regulatory capital requirements.

What Are Basel III-Compliant AT-1 Perpetual Bonds?

Additional Tier-I (AT-1) Perpetual Bonds are debt instruments issued by banks to strengthen their capital base under the Basel III regulatory framework.

These bonds are classified as Additional Tier-I Capital, helping banks:

• Improve the Capital Adequacy Ratio (CAR).
• Meet Basel III regulatory norms.
• Enhance their ability to absorb financial losses during periods of stress.
• Support future lending and business growth.

Unlike conventional bonds, Perpetual Bonds do not have a fixed maturity date. However, they generally include a call option, allowing the issuing bank to redeem the bonds after a specified period, subject to regulatory approval.

Previous AT-1 Bond Issuances

The upcoming SBI issue follows recent capital-raising exercises by Indian banks.

• Canara Bank was the last Indian bank to issue AT-1 Perpetual Bonds, raising ₹3,500 crore in November 2025 at a 7.55% coupon rate.
• SBI last issued Perpetual Bonds in October 2024, raising ₹5,000 crore with a 7.98% coupon rate and a 10-year call option.

The new issuance will make SBI the first Indian bank to issue Basel III-compliant AT-1 Perpetual Bonds in 2026.

Why This Bond Issue Is Important

The issuance is expected to provide several benefits for SBI:

• Strengthens regulatory capital under Basel III norms.
• Improves the Capital Adequacy Ratio (CAR).
• Supports credit growth and future lending.
• Diversifies long-term funding sources.
• Enhances the bank’s financial resilience.

About State Bank of India (SBI)

Key Highlights

• SBI will become the first Indian bank in 2026 to issue Basel III-compliant AT-1 Perpetual Bonds.
• The bank plans to raise ₹5,000 crore through the bond issue.
• The bonds will carry a five-year call option, subject to regulatory approval.
• The issuance is part of SBI’s ₹60,000 crore capital-raising programme for FY 2026–27.
• AT-1 Perpetual Bonds help banks strengthen capital, improve CAR, and comply with Basel III regulations.
• SBI’s Board approved the ₹60,000 crore fundraising plan in June 2026.