The State Bank of India (SBI) has doubled the limit for borrowing through medium-term notes (MTN) from $ 5billion to $10 billion. In a notice to the stock exchanges, SBI said that necessary documentation had been completed to allow it to borrow a larger amount.
In May this year, SBI chairman Pratip Chaudhuri had said the bank would soon be tapping the overseas markets for an amount of between $3 billion and $4 billion with a view to funding its international operations.
The first tranche was expected in July, but with Eurozone in turmoil and the subsequent downgrade of US debt by Standard and Poor?s, the bank is yet to mop up money. In February this year, SBI had raised around $325 million in Swiss francs and $750 million in November last year. Other banks have held back their borrowings: Bank of Baroda had planned to raise overseas funds worth $2 billion in 2011-12, but has so far raised about $ 1 billion. SBI? s balancesheet overseas is roughly of the order of $34 billion, having grown from just $7 billion in 2005. The bank is targeting a growth in its portfolio of about $6 billion (roughly 18%) this year. ?The idea is to tap the markets over the course of the current year and draw down the funds gradually in the process growing the balance sheet,? SBI chairman Pratip Chaudhuri had said in May, adding that there were business opportunities to be cashed in on.