SBI Plans $1.25 Billion Loan: Largest Dollar Loan by Any Bank in 2024
The State Bank of India (SBI), India’s largest public sector bank, is set to raise a massive $1.25 billion (₹10,553 crore) loan. This marks the biggest dollar loan secured by any bank this year.
Loan Details and Collaborating Banks
According to media reports, SBI is arranging a five-year loan with the assistance of CTBC Bank, HSBC Holdings, and Taipei Fubon Bank. The bank will pay an interest rate 92.5 basis points above the Secured Overnight Financing Rate (SOFR).
SBI is channeling this loan through its branch in Gujarat International Finance Tec-City (GIFT City). The funds will cater to the bank’s general business needs. However, SBI has yet to release an official statement regarding this development.
Collaboration with Local Financial Institutions
SBI is reportedly working with local financial institutions to expand its foreign currency borrowing. Many Non-Banking Financial Companies (NBFCs) in India are also increasing their dollar loans to meet business expansion requirements. Stricter regulations in India have pushed NBFCs to explore international funding options.
Other Banks and Financial Companies Following Suit
- Cholamandalam Investment and Finance Company: Raising $300 million.
- Bank of Baroda: Planning to raise $750 million.
Despite these efforts, the overall value of dollar loans raised this year has dropped by 27% to $14.2 billion, according to Bloomberg data.
SBI’s Recent Borrowings
In July 2024, SBI secured a $750 million three-year loan. The drop in dollar borrowings this year is attributed to fewer large-scale corporate loans.
SBI’s current initiative to raise $1.25 billion signifies its robust financial strategy to maintain liquidity and cater to expanding business operations.
