HDFC Bank board will consider a proposal for raising up to Rs 50,000 crore over the next 12 months, making it the country’s larest bond sale ever by a lender.

As it prepares for merger of parent HDFC with itself, HDFC Bank will have to meet higher reserve requirements. As per estimates, the requirement is more than 80,000 crore. The bank has some excess bonds in its portfolio.

HDFC Bank said that it would deliberate the proposal in its upcoming board meeting on April 16. It would also consider and approve the financial results for the March quarter and the fiscal year 2021-22.

"The Bank proposes to raise funds by issuing Perpetual Debt Instruments (part of Additional Tier I capital), Tier II Capital Bonds and LongTerm Bonds (Financing of Infrastructure and Affordable Housing) up to total amount of Rs 50,000 crore over the period of next twelve months through private placement mode," HDFC Bank said in a regulatory filing.

Earlier this week, the bank announced a proposal for merger of its parent, HDFC Ltd, with it, subject to regulatory approvals. Once the deal is effective, HDFC Bank will be wholly owned by public shareholders. The existing shareholders of HDFC will own 41% of the bank.

As of the December quarter, HDFC Bank’s capital adequacy ratio (CAR) as per Basel III guidelines was at 19.5% as against a regulatory requirement of 11.7%. Tier 1 CAR was at 18.4% and common equity tier 1 capital ratio was at 17.1%.