SBI raising $250 million foreign currency loans

Mumbai: The State Bank of India will raise a $250 million foreign currency loan for funding its overseas operations.

The loan will be a short-term facility maturing in 364 days and has been priced at approximately 32-33 basis points over the London inter-bank offered rate (Libor), banking sources said.

The Citigroup is arranging the loan. An senior SBI official said the bank has centralised its overseas borrowing plans to cut down the cost of funds. "Our overseas balance sheet grew by over 40 per cent last year. This money can be disbursed to Indian companies looking for dollar loans. The assets will be booked overseas," he said.

Bankers dealing in overseas syndication of foreign currency loans said that the rates compare well in the international market. This is because the ongoing rates for such a tenure is around 40 basis points over the Libor. For the sake of comparison, in rupee terms the rates come to 2.25 per cent if the loan has to be fully swapped into rupees.