Indian Bank plans to raise Rs 5,000 crore through Infra Bonds
In one or more tranches either current or future, the board approved raising more long-term Infrastructure Bonds, aggregating up to Rs 5,000 crore over and above Rs 10,000 crore already raised by the bank in the current FY 2024-25, Indian Bank said in a regulatory filing.
Public-Sector Lender Indian Bank Board said it proposes to raise Rs 5,000 crore through long-term infra bonds to fund infrastructure sector projects. In this regard, the board meeting of the bank approved the motion on Thursday.
In one or more tranches either current or future, the board approved raising more long-term Infrastructure Bonds, aggregating up to Rs 5,000 crore over and above Rs 10,000 crore already raised by the bank in the current FY 2024-25, Indian Bank said in a regulatory filing.
The fundraising would be conducted at a suitable period depending on the need for financing or refinancing of infrastructure and affordable housing in compliance with relevant RBI policies and other laws, rules, and regulations, it said.
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Such bond issuing by banks has attracted a lot of interest from domestic investors, and many lenders have lately used this option to obtain funds. Infrastructure bonds provide the benefit of exempting from regulatory reserve criteria including the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
Infrastructure bond revenues so can be completely used for lending purposes. Infrastructure bonds are better valued than AT-1 and Tier-2 bonds, so banks have been favouring them.
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