
State Bank of India mulls issuing retail bonds
Lender's launching of $11mln to $22mln seen as alternative way to bolster credit needs.
State Bank of India is planning to issue bonds to retail investors for the first time, testing an alternate way to raise funds when the market's capacity to absorb debt may be crimped by the government's record borrowing program.
State-run SBI, India's largest lender by assets, has been seeking ways to augment its capital as it needs to lend more to boost its own growth and support the credit needs of the local industry. The usual fundraising route for banks--borrowing from other institutions--may become costly with the government's 4.57 trillion rupees ($100.2 billion) bond program for the next fiscal year starting April 1 likely to squeeze liquidity and raise yields.
SBI is looking to issue 10-year retail bonds worth 500 million rupees ($11 million) to 1 billion rupees ($22 million), Chairman and Managing Director O.P. Bhatt told reporters on the sidelines of a conference Wednesday. "We are looking at it as a one-off additional product and the rate on that will be market determined."
View the full story in the Wall Street Journal.