SBI raises $300 million via 3-year bond after RBI’s ECB push

Mumbai: State Bank of India (SBI) has raised $300 million by issuing three-year senior unsecured floating-rate notes through its London branch, becoming one of the first large state-owned lenders to tap overseas debt markets after the Reserve Bank of India (RBI) announced measures to make external commercial borrowings (ECBs) more attractive.

In an exchange filing on Monday, the country’s largest lender said it had concluded the issuance of $300 million in senior unsecured floating-rate notes with a three-year maturity at a coupon of the secured overnight financing rate (SOFR) plus 100 basis points, payable quarterly in arrears.

The bonds have been issued under Regulation-S and will be issued through SBI’s London branch on 6 July.

Reg-S and Rule 144A issuances are commonly used routes for overseas bond sales, allowing issuers to access a wider pool of international institutional investors, particularly in the US and Asian markets.

This comes as the bank’s board, on 12 May, approved raising up to $2 billion through overseas bond issuances in FY27 as part of efforts to diversify its funding base and broaden access to global investors.

SBI last tapped overseas bond markets in September 2025, raising $500 million through a five-year dollar-denominated issue at a record-low coupon of 4.5%.

The fundraising comes after RBI, on 5 June, announced a package of measures aimed at encouraging overseas fundraising by banks and state-owned companies. Under the revised framework, the central bank will bear the cost of hedging for eligible foreign-currency borrowings, significantly reducing the all-in cost of raising capital overseas and making offshore markets more attractive than before. The measures are aimed at supporting foreign currency inflows, easing funding costs and deepening India’s external financing avenues.

The latest issuance also fits into SBI’s broader capital raising strategy for the current financial year. Earlier this month, the bank’s board approved raising up to ₹60,000 crore during FY27 through debt instruments, including long-term bonds and Basel III-compliant Additional Tier-I and Tier-II bonds, in both domestic and overseas markets to support business growth and strengthen its capital base.

As of March-end, SBI’s capital-to-risk weighted assets ratio stood at 15.40%, with a common equity Tier-I ratio of 12.29%.

The dollar bond sale marks an early utilization of that fundraising mandate and signals SBI’s intent to diversify its funding sources beyond the domestic bond market.

Market participants expect more Indian public sector banks and state-owned companies to tap international debt markets following RBI’s easing measures, particularly as reduced hedging costs improve the economics of foreign-currency borrowings.

So far, HDFC Bank, Axis Bank, and Power Finance Corporation have tapped the overseas markets to take advantage of RBI’s window.