The State Bank of India (SBI) will bring in the entire proceeds of the India Millennium Deposit (IMD) scheme to the country.
The first tranche of the issue proceeds will be brought in next week, SBI chairman Janaki Ballabh said.
"We will not keep any part of the issue proceeds abroad. The entire mop up will be brought in to the country. The inflow will start coming from the next week itself," Ballabh said.
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The SBI had kept a small part of the Resurgent India Bonds (RIB) floated in 1998 abroad to meet the corporate demand.
The IMD has garnered over $5.3 $ billion, Ballabh said. However, the mop up figure could go up marginally once the bank is in a position to take into account all the applications made. It will take a few days more to get the final figure, sources said.
Citibank has emerged as the largest collector of IMD funds with over $700 million collection, followed by HSBC (about $680 million), StanChart Grindlays and Abu Dhabi Commercial Bank. Among the Indian banks, ICICI Bank tops the list.
Part of the IMD corpus will be conversion of the FCNR(B) deposits. While the FCNR(B) deposits are parked abroad and part of the country's debt, the IMD proceeds will contribute to the foreign exchange assets. "The erosion in the FCNR(B) deposits will be replenished over the next six months," a senior banker said.
Opened on October 21, the issue had its earliest closing date on October 31. However, the SBI decided to extend the deadline to November 6.
The SBI offered an annual coupon of 8.5 per cent on five-year dollar deposits, 7.85 per cent on pound sterling deposits and 6.85 per cent on euro deposits.
The SBI will offer 50 per cent of the mop up the collecting banks at 10 per cent interest rate for a period of five years.