Money & Banking

IDBI Bank mulls raising $225 m overseas in FY’12

PTI Mumbai | Updated on May 11, 2011 Published on May 11, 2011

IDBI Bank on Wednesday said it is looking at raising a syndicated loan of $225 million in overseas market this fiscal for which the Asian Development Bank (ADB) will act as a partial guarantor.

The proceeds would be used for lending to micro, small and medium enterprises, IDBI Bank Chairman and Managing Director Mr R M Malla said here.

“We are planning to raise $225 million from various banks overseas. For this we are in talks with Asian Development Bank that will act as a partial guarantor, and with this, our cost of borrowing will come down. We will use the funds for lending to SMEs,” Mr Malla told reporters.

Besides, the public sector bank has launched a $1.5 billion medium-term-note (MTN) programme, of which around $400 million has already been raised in the last 2-3 months.

A MTN programme is cost beneficial for the institution as there is no time limit for shelf registration and the banks can save money on recurring expenses like legal expenses.

As per media reports, the bank plans to raise another $200-300 million through a Swiss franc-denominated bond sale in the next 12 months, for which it has hired investment managers such as BNP Paribas, Credit Suisse Group and UBS AG. When asked about this, Mr Malla declined to comment.

On the overseas expansion of the bank, he said after entering the Dubai market, it is now looking at new geographies such as Singapore and China.

“The RBI has already given us a nod for entering into these two markets, but nothing has been finalised yet,” Mr Malla maintained.

Published on May 11, 2011
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