Federal Bank approves raising Rs 1,000 crore through issue of debentures

Private lender Federal Bank has approved the issue of unsecured, basel-III compliant, tier-II, subordinate bonds worth Rs 1,000 crore in the form of debentures on a private placement basis.

The debentures are proposed to be listed on the NSE, the bank said in an exchange filing.

Tenure, nature, coupon rate, scheduled of payment among other factors will be decided by the allotment committee of the board.

Details of the subsequent meeting have not yet been disclosed.

Federal Bank, one of India's leading private sector banks, is eyeing expansion outside its home state of Kerala. While speaking to CNBC-TV18, Ashutosh Khajuria, the Executive Director of Federal Bank, said that the bank is planning to grow its branch network in several focus areas, including Gujarat, Maharashtra, Tamil Nadu, and Karnataka.

The bank's expansion plans are fueled by the success of its new branches, which are breaking even at a much faster pace than in earlier times. According to Khajuria, the bank's branches used to take three years to break even, but today, new branches are breaking even in just one year.

The focus on expansion outside Kerala is in-line with the Federal Bank's strategy of becoming a pan-India player in the banking industry. While the bank has a strong presence in Kerala, it has been working to increase its market share in other states.

Shares of Federal Bank are down 6.7 percent so far this year.