SBI has joined many Indian financial institutions and companies active in raising foreign currency loans this year. In July 2024, SBI raised a three-year loan of $ 750 million. Now again it is preparing to raise more than Rs 10 thousand crores. Let us understand the reason behind this plan of the company.

State Bank of India (SBI) is now preparing to take the country's largest loan. The company plans to borrow up to $ 1.25 billion i.e. Rs 10,552 crore, which will be the largest loan deal from India's financial sector this year. Sources related to the matter said that this loan will be taken for a period of five years and it is being raised through the Gujarat International Finance Tech-City (GIFT City) branch.

The time period of the loan will be 5 years.

This deal is being led by CTBC Bank, HSBC Holdings PLC, and Taipei Fubon Bank. The interest rate on the loan has been kept at 92.5 basis points above the Secured Overnight Financing Rate (SOFR). Its purpose is to raise financial facilities for general corporate functions. This loan is being syndicated to other financiers, which will give it more comprehensive financial support.

SBI has joined many Indian financial institutions and companies active in raising foreign currency loans this year. In July 2024, SBI raised a three-year loan of $750 million. Additionally, non-banking finance companies (NBFCs) have also focused on foreign loans due to pressure from domestic regulations.

These banking companies are also raising loans

Cholamandalam Investment and Finance Company recently became the latest Indian NBFC to raise a syndicated term facility of $300 million. Similarly, Bank of Baroda is in the process of raising a loan of $750 million and Union Bank of India's Sydney branch is in the process of raising a loan of $81 million (A$125 million). According to Bloomberg data, India's total dollar loan volume has fallen by 27% to $14.2 billion in 2024. The main reason for this is believed to be less borrowing by large Indian companies, although many small and medium financial institutions have been active in recent months.

This move by SBI reflects the boom in dollar-denominated loan raising activities in the country's financial sector. This effort to raise funds through GIFT City also strengthens India's role as an international financial center. SBI has not yet made any official comment on this deal, but this initiative not only reflects the growing global ambitions of Indian financial institutions, but also presents new opportunities for investors.