A Tier 2 bond is a subordinated bond that a bank or NBFC issues to count as Tier II capital under RBI rules. It has a fixed maturity, ranks below depositors and senior creditors, and may carry loss-absorption clauses.
RBI sets conditions for Tier II instruments, including a minimum original maturity of five years and limits on early redemption. For banks, Tier 2 bonds under Basel III can be written down or converted if the RBI decides the bank has reached the point of non-viability.
Tier 2 bonds rank above AT1 perpetual bonds but below deposits and senior bonds. They usually pay more than the same issuer's senior bonds.
Tier 2 bond: issuers on Bond Interpretation
212 outstanding bonds of this kind from 71 issuers are on Bond Interpretation. Issuers with the most:
- Muthoot Fincorp Limited 14 bonds
- Bank Of Baroda 10 bonds
- ESAF Small Finance Bank Limited 9 bonds
- Axis Finance Limited 8 bonds
- Punjab National Bank 8 bonds
- Credila Financial Services Limited 7 bonds
- Mahindra and Mahindra Financial Services Limited 7 bonds
- State Bank Of India 7 bonds
- AU Small Finance Bank Limited 6 bonds
- Bank of maharashtra 5 bonds
- Central Bank of India 5 bonds
- Hdb Financial Services Limited 5 bonds
- Hero FinCorp Limited 5 bonds
- ICICI Home Finance Company Limited 5 bonds
- Indian Overseas Bank 5 bonds
Data as of 6 Nov 2026 (snapshot 20261106-2030). Methodology and sources
Related
Related terms: Subordinated debt · Perpetual bond (AT1) · Unsecured NCD
Before investing, look up the issuer: all its outstanding bonds, rating history and disclosure documents.
This page is for information only. It is not investment advice, a credit rating or a recommendation to buy, sell or hold any security. Facts are taken from the issuer's own documents and the sources linked on this page; check them with the source before investing.
