Speaking at a press conference to announce the launch of the fourth series of Flexibonds issue here on Thursday, Rao said that IDBI has also sanctioned Rs 62 crore for the Kondapally power project and Rs 65 crore for the Satyam Computer Services' expansion project. The bank will give top priority to the infrastructure sector while Andhra Pradesh will be a favoured state by virtue of its policies such as endowment, enterpreneurship and money.

Andhra Pradesh tops other states in disbursements and sanctions, he said. During the first quarter, while the bank sanctioned about Rs 889 crore for Andhra Pradesh alone, the disbursements stood at Rs 220crore.

On the flexibonds, he said, the size of the issue, which opens on September 21, is Rs 750 crore with an option to retain an additional Rs 750 crore. The issue offers four instruments -- regular income bond, education bond, growing interest bond and deep discount bond.

The regular income bond offers a return of 14 per cent annualised for a period of seven years. The investor has the option to receive interest payments either half-yearly or annually.

The education bond is designed to help the investor meet the future financial requirements on children's education.

The growing interest bond has a built-in step-up in the interest rates -- from 11 per cent in the first year to 20 per cent in the seventh year.

The deep discount bond will give Rs 1 lakh after 17 years and six months with an initial investment of Rs 10,000.

The issue has been rated AAA by Crisis and CARE. The government has notified the issue as public securities under Indian Trust Act. The bank had mobilised over Rs 4,000 croreunder the previous three issues. IDBI Bank has been retained to act as banker to the issue.