Though IDBI has not decided the size and the pricing of the issue, it is preparing the ground for a bond issue in the US. According to an IDBI official, the conditions are not good. ``We are waiting for an opportune time, and the plan to tap the US market is a preliminary one,'' he added.

The timing of the bond issue in the US will depend on the demand for foreign currency funds and an `opportune' time which will enable the financial institution to arrive at the best possible pricing strategy for the issue.

Last week the SEC of the US had exempted IDBI from the provisions of the Investment Company Act in ``connection with the offer and sale of its securities in the US.''

The permission to IDBI comes in the wake of the State Bank of India getting a go ahead from the SEC for the Resurgent India Bonds which are open till August 24.

The timing of the IDBI's float in the market could also depend on the forex inflow through the RIBs as well as the rating due from Standard and Poor's. Moody's Investor Services and Duff and Phelps have already downgraded India's rating. The inflow from RIBs is expected to be in the region of $ 3 billion.

SEC's permission to IDBI is also seen as yet another example of the US government softening stance on the sanctions imposed on India.

IDBI, with an asset base close to Rs 60,000 crore, raised foreign currency borrowings equal to Rs 1,879 crore during 1997-98.