Indian Overseas Bank will raise $500 million via medium-term notes (MTN) as there is appetite for such issuances in the overseas financial markets, said M Narendra, Chairman and Managing Director. However, the timing of the MTN issuance will depend on the demand for credit, mostly from Indian companies with overseas operations, at the bank’s overseas branches.

Narendra, who retires on Thursday after nearly four years of being at the helm of IOB, said his bank is also evaluating the possibility of raising resources through infrastructure bonds.

Once the larger banks tap the markets with long-term bond issuances for on-lending to the infrastructure and affordable housing sectors, IOB too will tread the same path. The bank could raise up to ₹3,500 crore by issuing infrastructure bonds, said Narendra.

Meanwhile, in an aggressive bid to purge its balance sheet of bad loans, the bank sold bad loans aggregating to ₹1,367 crore in the first quarter against ₹1,700 crore in the whole of the previous financial year.

As at June-end 2014, IOB had gross non-performing assets of ₹10,351 crore (₹7,432 crore as at June-end 2013).

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