HDFC Bank is planning a dollar bond sale of at least $500 million this week, leveraging India's central bank subsidized hedging scheme for foreign currency borrowings. This strategy mirrors actions by State Bank of India and Bank of Baroda. Meanwhile, State Bank of India has also raised its FCNR(B) deposit interest rates to a maximum of 5.75% per annum for Non-Resident Indians, Overseas Citizens of India, and Persons of Indian Origin, a move enabled by the Reserve Bank of India's decision to cover hedging costs for specific deposit tenures.
HDFC Bank is preparing to launch a dollar-denominated bond issuance, aiming for at least $500 million. The bank intends to use the Reserve Bank of India's (RBI) subsidized hedging scheme, designed to reduce the cost of overseas borrowings for Indian banks. This initiative by HDFC Bank follows similar considerations by other major Indian financial institutions, including State Bank of India and Bank of Baroda, which have also explored or utilized the RBI's hedging facility.
In parallel, State Bank of India (SBI) has revised its interest rates for Foreign Currency Non-Resident (FCNR-B) deposits. The bank is now offering rates up to 5.75% per annum. This increase is specifically targeted at Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs). The backdrop for this revision is the RBI's recent announcement indicating that it will bear the hedging costs for certain maturities of these specific deposit types. This move by the central bank aims to encourage foreign currency inflows into India by making such deposits more attractive to the Indian diaspora abroad.
HDFC Bank is preparing to launch a dollar-denominated bond issuance, aiming for at least $500 million. The bank intends to use the Reserve Bank of India's (RBI) subsidized hedging scheme, designed to reduce the cost of overseas borrowings for Indian banks. This initiative by HDFC Bank follows similar considerations by other major Indian financial institutions, including State Bank of India and Bank of Baroda, which have also explored or utilized the RBI's hedging facility.