Yes Bank raises $150 mn loan from International Finance Corporation

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International Finance Corporation will be monitoring the beneficiaries of the loan under a fixed arrangement. (Reuters) International Finance Corporation will be monitoring the beneficiaries of the loan under a fixed arrangement. (Reuters)
SummaryPrivate sector lender Yes Bank today said it has raised a seven-year loan from World Bank group member International Finance Corporation.

Private sector lender Yes Bank today said it has raised a seven-year loan of USD 150 million from World Bank group member International Finance Corporation (IFC) for onlending to small businesses.

The Yes Bank has swapped the loan under the Reserve Bank's concessional swap window offered to banks in order to attract dollars, it said in a statement.

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"The final pricing in rupee for this loan is in line with the rupee deposit for that tenor," Yes Bank Group President Jaideep Iyer said. Longer tenor of the loan is a welcome factor for the bank, he added.

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Additionally, a part of loan given to small businesses will qualify as priority sector lending (PSL), which will be another advantage, he added.

The loans granted by International Finance Corporation include USD 45 million under a co-lending programme of IFC, USD 60 million from IFC's own account (both for seven years), and USD 45 million syndicated loan provided by Intesa Sanpaolo, Bank Muscat, Doha Bank and AKA Frankfurt for a tenor of two years, the statement said.

International Finance Corporation will be monitoring the beneficiaries of the loan under a fixed arrangement, Iyer said, adding that the bank's SME book stands at 9 per cent.

Under the new Governor Raghuram Rajan, Reserve Bank had opened a swap facility for banks offering a 1 percentage point discount to banks for funds raised overseas.

The facility was discontinued by RBI on November 30, but it had said that those who have already sealed negotiations with their lenders till that date can receive the funds till December 31.

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