New Delhi, August 21: Country's largest lender SBI Friday said its board has approved a proposal to raise Rs 8,931 crore by issuing Basel III compliant bonds to investors.

The bank in the regulatory filing said that the committee of directors for capital raising has given its approval to allot 89,310 Basel III compliant non-convertible, taxable, redeemable, subordinated, unsecured, fully paid-up debt instruments aggregating to Rs 8,931 crore to bond subscribers.

The bonds in the nature of debentures qualifying as tier 2 capital of the bank have a face value of Rs 10 lakh, bearing a coupon of 6.80 per cent payable annually for a tenor of 15 years.

SBI said the bonds come with a call option after 10 years or any anniversary date thereafter to bond subscribers.

Call option means the issuer of the bonds can call back the bonds before the maturity date by paying back the principal amount to investors.

Under Basel-III Capital Regulations, banks need to improve and strengthen their capital planning processes.

Since 2013, Basel III norms have been implemented in phases by domestic banks to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks.

Meanwhile, shares of SBI closed at Rs 198.35 apiece on BSE, up 1.87 per cent from previous close.