The state-owned lender IDBI Bank today said it will mobilise $1 billion from foreign markets by the end of the fiscal as the domestic corporates have started showing a "healthy appetite" for credit.
"By the end of the fiscal, our foreign currency book will be $1 billion," bank's Executive Director and International Banking Head Melwyn Rego told reporters here.
Rego said last week, IDBI Bank had already raised $350 million under its $1.5-billion medium term loan programme at 2.60 per cent above the international interest rate benchmark Libor, which he claimed is amongst the tightest rates in recent times by a domestic lender.
The lender had also raised a $100-million syndicated loan in January and had in July secured a commitment for an additional $100 million which can be drawn in three months, Rego said, adding the bank is also in talks to raise $100 million each from a multilateral agency, a line of credit from export credit agencies.
Rego clarified that the bank is not in talks with traditional lenders like the World Bank and Asian Development Bank and added the bank will not be required to give a government guarantee for securing funds. "The first tranche will be of $100 million and the agency has assured to release more money as per our requirements," he said.
Rego further said, the bank's branch at the Dubai International Finance Centre had already mobilised $350 million last week, and bank will offer this fund as foreign currency funding to domestic corporates. "Since the money is raised abroad, it will be construed as an external commercial borrowing if it is brought to the country. But we will lend it to domestic corporates for their international requirements," Rego said.
When asked about the demand for foreign currency loans by domestic corporates, Rego said, "there is a healthy appetite, we synchronise our fund raising with the offtake."
IDBI Bank, which opened its maiden international branch in Dubai this January, has sought regulatory approvals from the respective countries to commence an offshore banking unit in Singapore and a representative office in Shanghai, Rego said.
