Public sector lender Indian Overseas Bank (IOB) Friday said its board has approved raising up to Rs 300 crore on a private placement basis through globally accepted Basel III complaint bonds.

"The board of directors of the bank, have by circular resolution... approved the raising of tier II capital by issue of tier II Basel III compliant bonds for an issue size of Rs 200 crore with green shoe option of additional Rs 100 crore aggregating Rs 300 crore in one or more tranches on a private placement basis," Indian Overseas Bank said in a regulatory filing.

To comply with Basel-III capital regulations, banks globally need to improve and strengthen their capital planning processes.

These norms are being implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks.

Indian banking system has been implementing Basel III standards in phases since April 1, 2013. The banks are expected to fully implement these norms by March 2019.

This will align full implementation of Basel III in India closer to the internationally agreed date of January 1, 2019.

The shares of Indian Overseas Bank were trading at Rs 14.30 apiece, 1.03 per cent lower, at 15:13 hours on BSE.