The original plan was to handover a cheque worth $2 billion to the Indian prime minister Atal Behari Vajpayee on August 15, the Independence Day. The issue managed to mop up about $1.45 billion by August 15.

Analysts attributed the "lukewarm" response to the issue is the apparent "mismanagement" in the US in marketing the issue. Besides, NRIs are believed to have been flocking to banks to withdraw their existing FCNR(B) deposits and convert themto RIB's. Another factor that has contributed to the slow pick-up in response is a spate of holidays in the Middle East and the US.

SBI Caps managing director AR Barwe said the issue has a demonstrative effect and has made it amply clear that India can raise in funds. It will also bring down the pressure on the rupee (vis-a-vis dollar), he pointed out.

The "success" of RIB's will also helps bring down the spread on Indian papers in the secondary market and will set up a benchmark for the new ECBs of triple-A (AAA) rated India corporates.

The RIB issue may not have any significant impact on the domestic liquidity front as even if the issue mops up $3 billion--and the entire corpus is swapped with the rupee--it will translate into Rs 12,900 crore worth of fund infusion into the system against a quarterly incremental deposit growth of Rs 34,000 crore.

Barwe maintained that even if the rupee depreciates about 6 per cent per annum, the cost of five-year money would not work out more than 14 per cent. In1997, 16 sovereign issues (bonds as well as loans) in the world market were able to mop up over $1 billion, five-year funds out of which at least five issues were rollover of existing papers. Brazil, Russia, Mexico floated three issues each, followed by South Africa and Argentina (two each) and Saudia Arabia and Venezuela (one each).