In a move to finance infrastructure and affordable housing, Bank of Baroda is set to raise ₹10,000 crore ($1.35 billion) through the issuance of infrastructure bonds, according to an announcement made on Tuesday. These long-term debt instruments are exempt from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) as per Reserve Bank of India (RBI) guidelines.
The bank's decision will be discussed further in a board meeting scheduled for Wednesday, October 11, where the issuance of a ₹2,000 crore ($270 million) tier-1 bond will also be considered. This fund-raising mechanism has been previously utilized by other banks such as State Bank of India, Canara Bank, and ICICI Bank.
Simultaneously, Power Grid Corporation of India announced plans to raise ₹2,250 crore ($303 million) via non-convertible debentures. This includes a base size of ₹500 crore ($67 million) and a greenshoe option worth ₹1,750 crore ($236 million).
This comes amid a surge in banking activity in India. Recent data from the RBI shows a 20% year-on-year bank credit growth and a 13.2% deposit growth. These figures indicate an increased demand for banking services and credit in the country, providing an optimistic backdrop for these fundraising efforts.
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