Last week, the Reserve Bank of India (RBI) decided to close its discounted dollar-rupee swap facility for banks ahead of schedule. The scheme, introduced in June to help banks hedge non-resident deposits at a lower cost, is expected to bring nearly $80 billion in foreign currency inflows, according to RBI Governor Sanjay Malhotra. Taking advantage of this opportunity, several Indian banks have raised funds through dollar bond issuances. HDFC Bank is planning another overseas bond sale, which would increase its total dollar bond fundraising to $1.75 billion, making it the second-highest after ICICI Bank. ICICI Bank has also raised funds by targeting US-based investors, while IDFC First Bank recently secured $600 million through its first-ever three-year dollar bond issue. Overall, Indian lenders have raised $7.55 billion through dollar bonds since the RBI announced the concessional hedging facility on June 5. The swap window will now close on August 31, one month earlier than the original deadline of September 30.
.business-standard