Indian Bank to Boost Infrastructure with Rs 5,000 Crore Bond Issue

Indian Bank plans to raise Rs 5,000 crore via long-term infrastructure bonds to support infrastructure projects. Approved by the bank's board, this move follows Rs 10,000 crore already raised this fiscal year. The issuance will occur based on financing needs and comply with RBI and other regulations.

In a strategic move to bolster infrastructure financing, state-owned Indian Bank announced its intention to raise Rs 5,000 crore through long-term infra bonds. The decision, sanctioned during the bank's recent board meeting, aims to enhance the bank's lending capacity for infrastructure projects.

This fundraising effort adds to the Rs 10,000 crore already secured in fiscal year 2024-25, with plans to execute in multiple tranches as needed. Indian Bank's initiative is aligned with compliance standards from the Reserve Bank of India, ensuring adherence to prevailing financial regulations.

The strategic preference for infrastructure bonds is partly due to their exemption from regulatory reserves such as the Cash Reserve Ratio and Statutory Liquidity Ratio, thus enabling banks to fully allocate the proceeds for lending. Such financial instruments have proven attractive to domestic investors and are increasingly favored over AT-1 and Tier-2 bonds for their competitive pricing.

(With inputs from agencies.)