Indian banks fast-track dollar fundraising after RBI moves FX swap window deadline

Central Bank of India

17/08/2026 12:24

By Dharamraj Dhutia and Khushi Malhotra
MUMBAI, Aug 17 (Reuters) - Indian lenders are rushing dollar loan and bond issues over the next two weeks after the central bank unexpectedly advanced the end date for an FX swap facility that banks were using for hedging exposure to deposits raised from diaspora. 
As part of a raft of measures to boost inflows, lenders were permitted to use these overseas borrowings to offer loans to non-resident Indians. Banks' overseas fundraising had also been subsidised.
Now, with the Reserve Bank of India announcing the closure of the forex swap window for August 31, a month earlier than initially planned, Indian private and state-run banks are on track to raise at least $5 billion through a combination of bonds and loans, four bankers said.
"Some of the fund raising plans have been brought forward to utilize the last few days," Akshay Naik, India head of debt capital markets at Citi, said. 
"We will have one of the busiest windows for the next 6-8 days from India. Few institutions who are not ready may need to drop their plan if it was solely meant for FCNR leverage."
Large private-sector lenders such as ICICI Bank ICBK.NS and HDFC Bank HDBK.NS are in talks to raise about $1.5 billion each via dollar bonds and loans, while peers including Axis Bank AXBK.NS, YES Bank YESB.NS, RBL Bank RATB.NS and Kotak Mahindra Bank KTKM.NS are planning to raise at least $500 million each through overseas debt markets, bankers said.
State-run lenders State Bank of India SBI.NS, Bank of Baroda BOB.NS, Punjab National Bank PNBK.NS, Canara Bank CNBK.NS, Union Bank of India UNBK.NS, Bank of India BOI.NS and Central Bank of India CBI.NS are targeting dollar raises of $250 million to $500 million each, with the larger banks likely to target bigger issues, the bankers said.
None of the lenders replied to Reuters emails seeking comment. 
All the bankers declined to be named as the discussions are private.

   BANKS ON TRACK FOR RECORD DOLLAR FUNDRAISING    
   Indian lenders have raised a combined $5.93 billion through dollar bond sales and loans so far this year, according to LSEG data through August 11. 
The tally has climbed by another $1.2 billion, following debt sales by two large state-run lenders last week. 
        
Over the last 15 years, banks' annual foreign borrowing topped $6 billion on three occasions, including in 2013, when the RBI had opened a swap window.
"Would expect $5-7 billion of additional bond and loan issuances for the remainder of year," Naik said. 

 (Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Mrigank Dhaniwala)
 ((DharamrajLalit.Dhutia@tr.com; Khushi.malhotra@tr.com))