PNB raising $1 billion for FCNR on-lending
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The financing is being offered at a rate up to 125 basis points above the secured overnight funding rate (SOFR), with the rate linked to the loan size offered by banks. The loan will qualify for the special swap facility of the Reserve Bank of India. "This loan is already under syndication, and several banks are evaluating it to take a piece. Final pricing of this loan will be fixed after we know how much each bank is taking on their books. More banks are likely to join since the amount is so big," said a person aware of the details. The loan is aimed at attracting potential leveraged investors in the dedicated forex-deposit program allowed by the central bank. This loan is part of the overall demand for foreign currency loans from Indian banks to take advantage of the special foreign currency window," said the person cited above. PNB and Mashreq did not respond to an email seeking comment. CTBC could not be reached for a comment. All large Indian banks are in the dollar fund market to raise funds. The foreign currency raised will be used to provide leverage to overseas clients making FCNR (B) deposits with the bank. RBI is absorbing the entire currency hedging cost for banks on fresh three- to five-year FCNR (B) deposits, allowing banks to raise fresh funds without worrying about hedging costs. Under the scheme, fresh or renewed foreign currency deposits must be booked by September 30 for a three-to-five-year maturity with a lock-in of one year. Banks can use the Reserve Bank of India (RBI) concessional swap window until October 16. This is PNB's first dollar loan under this new facility. Earlier this week, State Bank of India (SBI) and HDFC Bank were in the market to raise $1.7 billion between them through loans from foreign banks, ET had reported. (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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