365Telugu.com online news, November 15th,2024: State Bank of India (SBI), India’s largest lender, is planning to raise up to $1.25 billion through a dollar-denominated loan, making it the country’s biggest financial sector loan of the year, according to sources familiar with the matter.
The five-year loan is being arranged by CTBC Bank, HSBC Holdings Plc, and Taipei Fubon Bank, with an interest margin set at 92.5 basis points above the Secured Overnight Financing Rate (SOFR), the sources revealed, requesting anonymity as the discussions are private.
The loan facility is being raised for general corporate purposes through SBI’s branch located at Gujarat International Finance Tec-City (GIFT City), India’s new financial hub. The arrangement is also being syndicated to other financial institutions, according to the sources.
SBI has not issued any official comments regarding this development.
Part of a Larger Trend
SBI joins several Indian financial institutions seeking foreign currency loans in 2024. Non-banking finance companies (NBFCs) have notably turned to dollar-denominated loans due to tightening regulations in the domestic market.
Recent examples include Cholamandalam Investment & Finance Co., which is pursuing a $300 million syndicated loan, Union Bank of India’s Sydney branch raising A$125 million ($81 million), and Bank of Baroda seeking $750 million in borrowings.
A Decline in Loan Volume
Despite increased activity in foreign currency loans, India’s overall dollar loan volume has declined by 27% this year, totaling $14.2 billion. This drop is primarily attributed to the absence of large-scale corporate borrowings, according to Bloomberg data.
SBI itself raised a $750 million three-year loan in July, marking another significant borrowing initiative for the financial giant.
This latest $1.25 billion loan underscores SBI’s strategic efforts to strengthen its financial capabilities and further its corporate objectives while leveraging India’s growing presence in global financial markets.