HDFC Bank 1st to use RBI's swap, raises $750 million
HDFC Bank is the first to use Reserve Bank of India (RBI)'s new special swap facility, raising $750 million through five-year bonds at GIFT City.
This move comes thanks to RBI's June 2026 special swap arrangement that lets banks sell dollars to RBI and buy them back at the end of the tenure at a fixed rate of 1.5% per annum compounded semi-annually, making it way cheaper for them and opening doors for more foreign money in India.
Strong investor demand, banks ready
The bond sale was a hit: 90 investors wanted in, with Asian buyers leading the pack.
The central board of State Bank of India (SBI) will meet on June 18 to seek approval to raise funds, and public sector units such as Power Finance Corp are likely to frontload their external borrowings to benefit from the central bank facility.
Japan's MUFG thinks inflows are likely to be close to $75 billion. It looks like Indian banks are ready to jump on this opportunity.