IDBI Bank likely to raise up to $1 billion through overseas bonds

IDBI Bank, state-run lender is likely to raise between $750 million and $1 billion through sale of foreign-currency-denominated bonds and loans in the current financial year. In 2011-12 it had raised $840 million via this route.

The bank will increase the limits on the medium-term note (MTN) programme to $2.5 billion from $1.5 billion. Under the MTN programme, the issuer has the flexibility of raising funds in tranches on a continuous basis. The bank has raised $300 million in the current financial year in the form of bank loans through bilateral, multilateral or syndicated channels. The bank will raise funds from overseas markets in small tranches to reduce carrying cost.

Recently, IDBI Bank has established ultra small branches (USBs) in 16 locations in villages to cater to the financial needs of the rural populace and is in the process of establishing such USBs in all the villages allotted to the bank for financial inclusion.