In a major financial development, the Board of Directors of the Union Bank of India has officially approved a proposal to raise up to ₹8,000 crore in capital. The decision, finalized during a board meeting on Tuesday, May 26, 2026, aims to strengthen the public sector lender’s capital base through a strategic mix of both debt and equity instruments.
According to a regulatory filing submitted to the Bombay Stock Exchange (BSE), the capital raise will include a debt component of up to ₹5,000 crore. This will be secured through the issuance of Basel III-compliant Additional Tier 1 (AT1) bonds and/or Tier 2 bonds, ensuring the bank maintains robust regulatory capital ratios aligned with international banking standards.
In addition to the debt capital, the board has greenlit the raising of ₹3,000 crore through equity capital. This equity dilution will be executed in multiple tranches within the overall ₹8,000 crore limit. The bank stated that it may utilize various routes for this equity expansion, including a Further Public Offer (FPO), rights issues, or private placements such as Qualified Institutions Placements (QIP) and Preferential Allotments.
Following the announcement, Union Bank of India’s shares experienced a minor correction on the stock exchange. The bank’s stock was trading at ₹167.25 on the BSE, marking a slight decline of 1.01 percent compared to the previous day’s close. Industry analysts view this capital infusion as a proactive step by the state-run lender to fund future growth opportunities and fortify its balance sheet against potential economic headwinds.
