The new-found zeal of the State Bank in raising forex loans is part of the bank's strategy to turn it into a one-stop shop where corporates can access rupee loans (term loans as well as working capital facility) as well as forex loans. Besides, it is also in line with the bank's increasing focus on raising fee-based income.

On March 19, the State Bank concluded the $120-million syndicated deal for the National Thermal Power Corporation (NTPC). The five-year loan carries a coupon of 150 basis points over the five-year euro dollar (at the date of signing the deal). Since the five-year euro dollar (the US inter-bank borrowing rate) was pegged at 5.71 per cent on March 19, the NTPC loan carried a fixed coupon of 7.21 per cent.

The five-year loan was syndicated amongnine foreign banks and five public sector banks including BA Asia, Standard Chartered, Natexis BFCE, Credit Agricole, Bank of India, Indian Bank, Indian Overseas Bank and Uco Bank. The Dhabol phase-II loan was priced at 3.75 per cent over the London inter-bank offered rate (Libor). The all-in cost of the loan will work out to be over 4 per cent over Libor.

"It is a breakthrough for the State Bank. We have decided to leverage our domestic strength to the hilt. From now onwards, the bank will be aggressively hawk syndicated loans," SBI sources said. The bank has underwritten about 30 per cent of the Dabhol phase-II loan. "We will offload it in the syndicated loan market later. For the time being, we can finance it from the Resurgent India Bond proceeds, part of which has been perked abroad," sources said.

The bank has also been picking up Indian debt papers from the secondary market at a hefty discount using the RIB proceeds. So far it has bought Reliance, Telco and ONGC papers. "We are open to the idea ofbuying more Indian papers from the secondary market," sources said.