Bank of Baroda said its board of directors had approved the raising of up to Rs 1,000 cr by selling perpetual bonds.
The bonds would be sold via private placement, i.e. without a public auction or book building.
The timing and other details will be determined by market conditions, the Gujarat-based bank said.
Bank of Baroda is India’s second largest public sector bank by loanbook size. The bank, which was seized by the government in 1969, was listed on the bourses in 1996 via an initial public offer.
The bank is controlled by the government of India, which still owns over 65% of its shares.
Last month, the company reported a net profit of Rs 252.67 crore against a loss of Rs 3,342.04 crore in the same quarter last year.
It reported a decline in its bad loans, but did not give any guidance about the timeline for the resolution of the issue. India’s public sector banks are facing a bad-loan crisis, the result of years of easy lending practices.