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Informist, Thursday, Apr. 23, 2026

 

--Indian Bank source: May raise up to INR 100 bln via infra bonds FY27
--Indian Bk source:High equity returns making it difficult to raise deposits
--Indian Bank source: Q4 treasury income seen low on high bond yields

 

By Sagar Sen, Shakshi Jain, Priyasmita Dutta, and Shweta

 

NEW DELHI – After successfully raising INR 50 billion through infrastructure bonds in March, Indian Bank is again planning to mobilise more resources through this instrument in financial year 2026-27 (Apr-Mar), a senior bank official said Thursday. "Infrastructure bonds have emerged as a very good instrument to raise money at a time when banks are finding it difficult to attract deposits," the official told Informist. The official said the bank may look at raising INR 50 billion-INR 100 billion during the year depending on the credit growth. 

 

On Mar. 23, Indian Bank raised INR 50 billion through 10-year infrastructure bonds at a coupon of 7.15%. The official said that the bank is likely to seek board approval soon so that enabling provisions are in place.

 

Indian banks are increasingly issuing infrastructure bonds to fund long-term projects while managing asset-liability mismatches. These long-term bonds allow banks to raise funds at competitive rates while tapping into investor demand for higher yields.

 

As of Mar. 31, Indian Bank's advances grew 13.6% on year to INR 6.68 trillion, while total deposits were up 12.6% on year at INR 8.30 trillion. The lender's current account savings account ratio also contracted to 39.86% as of Mar. 31 from 40.17% a year ago.

 

"The deposits are growing at a slower pace than the advances for the last few quarters and that is likely to continue for the foreseeable future," the official said. "As long as the equity market and other financial instruments continue to give higher returns than bank deposits we will face this issue. That is the reason we have to look for all possible alternatives," the official said.

 

The official also said that in Jan-Mar the bank faced some challenges in managing its treasury book due to mark-to-market losses from a sharp rise in government bond yields and the Reserve Bank of India's regulatory measures in the foreign exchange segment. The RBI had rolled out regulatory measures to curb volatility in the exchange rate, including putting a cap of $100 million on onshore net open positions of banks. In March, the 10-year bond yield rose almost 37 bps after Israel and the US launched an aerial attack on Iran on Feb. 28.

 

In FY27, the official said that the bank may not look to raise capital as it is adequately capitalised to support credit growth. For the December quarter, Indian Bank had reported a net profit of INR 30.61 billion and a total income of INR 196.63 billion. Thursday, shares of Indian Bank closed nearly 1% lower at INR 914.95 on the National Stock Exchange.  End

 

Edited by Deepshikha Bhardwaj

 

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