In a report in the Economic Times, the bank is in the preliminary stage, but is hoping to raise funds in the third quarter of the ongoing fiscal.
For the first time, largest public sector lender State Bank of India (SBI) is looking to raise Rs 5,000 crore through infrastructure bonds, which will help it reduce its dependency on core deposits to lend to customers and also help reduce overall cost of funds.
Almost 97 percent of bank’s liabilities in the form of deposits. Its private contemporaries like ICICI Bank and Axis Bank have raised infrastructure bonds in the past.
In a report in the Economic Times, the bank is in the preliminary stage, but is hoping to raise funds in the third quarter of the ongoing fiscal.
The Reserve Bank in 2014 had allowed banks to raise bonds that would be exempted from statutory reserves. Proceeds from these can be put into infrastructure and housing projects, the RBI had said.
The banks are required to invest 20.75 percent of borrowings as deposits or government securities as a cushion against loan loss.
SBI is also looking to invest in similar bonds depending on the success of first issue, an official told ET.
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