With a focus on agricultural and microenterprise loans, the facility is designed to further strengthen and extend SBI's priority sector lending activities, the bank said.
"We are glad that KfW has chosen us as its partner to foster a focused growth in agriculture sector where we are already a market leader with more than 20 per cent of the market share," SBI's managing director V G Kannan said.
SBI will be onlending these funds to underserved sectors, thereby contributing to the generation of growth, employment and income, it said in a statement.
The loan has a maturity of 15 years.
The entire process of fund raising was facilitated by SBI's subsidiary, SBI Capital Markets.