HDFC Bank in talks with 4 West Asian banks to raise $2 billion

HDFC Bank is in talks with four West Asian banks to raise $2 billion for its FCNR(B) scheme, aiming to garner $10 billion under RBI’s concessional swap schemes by end-September. The bank also plans $1.2 billion bond issuance.

Written by Manju AB

August 13, 2026 19:37 IST

HDFC Bank was the first bank to tap the overseas market for an overseas bond issuance after the RBI announced the swap facility.

Private sector lender HDFC Bank is in talks with four West Asian banks to raise $2 billion to fund its leverage product under the special FCNR(B) scheme, a source familiar with the development said.

The lenders that are being tapped include Mashreq Bank, First Abu Dhabi Bank, National Bank of Ras Al Khaimah and ADCB.

HDFC Bank is looking to garner $10 billion under the Reserve Bank of India’s three concessional swap schemes via FCNR(B) deposits, external commercial borrowings (ECBs) and overseas foreign currency borrowings (OFCBs), the source added.

The bank has intensified its efforts to garner the maximum foreign currency non-resident (Bank), or FCNR(B), deposits during the remaining part of the RBI’s swap window, which closes on end-September. Effective 1 August, the private lender raised the interest rate on its three- to five-year FCNR(B) deposits by 25 basis points to 6.25% from 6%.

“It is the West Asian region that is giving the maximum flows so the bank is trying to tap the local banks there to fund the leverage products on its loan book,” said the source.

HDFC Bank is also planning to raise $1.2 billion via bonds under its medium-term note (MTN) programme. The initial price guidance for this issue is 120 basis points over the five-year US Treasury rates. “The bank may raise $1.2 billion in multiple tranches, depending on the pricing in the overseas market,” the source said.

HDFC Bank was the first bank to tap the overseas market for an overseas bond issuance after the RBI announced the swap facility. The bank in June raised $750 million at 90 basis points over the 5-year US Treasuries.

According to the data presented by Minister of State for Finance Pankaj Chaudhary in Parliament, HDFC Bank’s FCNR(B) deposits outstanding stood at $5.42 billion as on 30 July compared to $4.02 billion on 5 June. The net growth of $1.4 billion during this period can’t be concluded as deposits mobilised under the RBI’s swap scheme as some of them would have matured.

The data showed that banks had FCNR(B) deposits outstanding of $60.55 billion as on 30 July, increasing from $32.56 billion on 5 June. The net growth amounted to $28 billion, different from RBI’s data of $36.73 billion total inflow of FCNR(B) deposits until 31 July coming under the special swap scheme. This could be due to FCNR(B) maturities and withdrawals during this period.

This article was first uploaded on August thirteen, twenty twenty-six, at thirty-seven minutes past seven in the evening.