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Informist, Wednesday, Aug. 19, 2026

 

By Cassandra Carvalho

 

MUMBAI – Indian Overseas Bank has raised $100 million through a three-year dollar bond, joining other domestic lenders in tapping foreign currency funding following the Reserve Bank of India's incentives. The funds were received Tuesday and raised at a spread of 140 basis points over the three-month secured overnight financing rate, an official aware of the development said.

 

State Bank of India, the country's largest lender, had raised $200 million in July and $100 million this month at a spread of 100 bps over the reference rate. Indian Overseas Bank's loan may be used for commercial purposes or to provide leverage to depositors under the RBI's special scheme for foreign currency non-resident (banks) deposits. The central bank is covering the full hedging cost of 3-5 year FCNR(B) deposits raised until Aug. 31 and providing a concessional 1.5% per annum hedging cost on foreign currency loans until the end of December.

 

In its post-earnings press conference for the June quarter, Indian Overseas Bank management said it aims to raise $350 million through external commercial borrowing and $650 million through FCNR(B) deposits. The RBI on Friday reduced the timeline for the FCNR(B) deposit scheme by a month, to Aug. 31, prompting a spate of dollar bond issuances and higher rates for those notes. 

 

The state-owned lender reported a net profit of INR 16.59 billion for the June quarter, up over 49% on year. Wednesday, the bank's shares ended 0.3% lower at INR 33.18 on the National Stock Exchange. End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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