The State Bank of India (SBI), the country’s largest lender, announced on Tuesday its plan to raise up to $3 billion in foreign currency debt during the current fiscal year to support its anticipated loan growth of around 16%. SBI, which holds a fifth of the system-wide assets and liabilities, will secure these funds in one or more tranches through either a public offering or private placement of senior unsecured notes.
The funds will be denominated in US dollars or another major foreign currency, according to a statement released after a board meeting where the debt-raising plan was approved. “The executive committee of the central board, at its meeting held today, approved long-term fund raising in single or multiple tranches up to $3 billion via a public offer and/or private placement of senior unsecured notes in US dollars or any other major foreign currency during FY25,” SBI informed the stock exchanges.
This move aligns with broader efforts by banks to bolster their capital to meet increasing credit demand. Recent data from the Reserve Bank of India (RBI) indicates that credit demand rose by over 17% in May. In response, several public sector lenders, including Canara Bank, Punjab and Sind Bank, and Punjab National Bank, have also announced plans to raise funds through debt in this fiscal year.
Earlier this year, in January, SBI successfully raised 50 billion rupees (about $600 million) by selling Basel III compliant additional tier-I perpetual bonds. Furthermore, SBI Chairman Dinesh Kumar Khara announced last month that the bank is open to raise equity capital to fund its expansion objectives.
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