Dutch-Bangla Bank, one of the largest private banks by deposits, plans to raise Tk 1,200 crore through the private sale of subordinated bonds to boost capital.

The board of the bank has approved the plan, subject to approval from Bangladesh Bank and Bangladesh Securities and Exchange Commission, the bank said in a filing to the Dhaka Stock Exchange today. The bonds will mature in seven years.

The objective behind the issuance of the bonds is to increase capital under Basel-III rules and strengthen the capital base to comply with regulatory requirements, the lender said.

This tier is comprised of revaluation reserves, general provisions, subordinated term debt, and hybrid capital instruments, according to Investopedia.

The subordinated bonds, a debt instrument that is paid back after other bonds, if the issuer such as a company or government offering it for sale, gets into financial difficulty, will be fully redeemable, unsecured and non-convertible.

Shares of Dutch-Bangla Bank remained unchanged at Tk 59.10 at 12 pm.