MUMBAI, Nov. 28 -- Canara Bank's move to tap the domestic market for Rs.3,500 crore in additional tier-1 (AT-1) bonds is poised to reopen the perpetual bond window for Indian lenders after nearly a year of silence, with several state-owned banks preparing to follow if pricing holds.

The Bengaluru-based lender has invited bids on Friday on the National Stock Exchange, according to three people aware of the lender's plan. This will make it the first Indian bank this financial year to test investor appetite for these higher-risk capital instruments.

The last time an Indian lender raised funds through AT-1 bonds was in October 2024, when State Bank of India borrowed Rs.5,000 crore at 7.98%.

Canara Bank's decision has prompted Punjab Nation...