After raising additional capital to the tune of Rs 2 billion (US$45 million) by issuing perpetual bonds, public sector lender-Union Bank of India is now planning to raise Rs 300 crore from its Tier II capital.

As the fund raising plans, the bank will issue bonds at a coupon rate of about 11 percent against 11.15 percent rate on the issue of its Hybrid Tier I Capital.

Coupon rate of a bond is the amount of interest paid per year expressed as a percentage of the face value of the bond.

The bank will soon make an announcement about the same.

The bonds are ranked as `AA+ / Stable` by CRISIL & `LAA` with Stable outlook by Investment Information and Credit Rating Agency (ICRA).

"This is a part of our plan to raise Rs 1,000 crore. We will be raising another Rs 500 crore lower tier capital by the month-end," stated the Chairman and MD of Union Bank, Mr. M V Nair.

The amount raised through these bonds would help the bank uphold its capital adequacy ratio (CAR). Presently the bank's CAR is around 12.22 percent and it targets to maintain it at 12 percent. The CAR would stand around 11.23 percent after meeting the Basel II norms.

CAR is a ratio of a bank's capital to its risk.

Shares of Union Bank of India were trading at Rs 153.25 down 1.67 per cent.

Union Bank of India has also launched the wealth management services for its high net worth clients, which will provide a wider range of solutions to its customers. The Bank has tied up with Wealth Advisors (India) Pvt Ltd for this purpose.

The bank is also acting as an agent on the new scheme of Delhi Development Authority (DDA). It has been assigned the authority to collect applications and refundable registration fee on behalf of DDA.