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SBI to raise $ 3 billion from NRIs

State Bank of India is raising about $ 2 billion worth of foreign currency deposits from non-resident Indians and overseas corporate bodies through resurgent India bonds for financing the large working capital requirements of various infrastructure projects in the country.

The five-year bonds denominated in dollars, British pounds and Deutsche marks, will carry an annual interest rate of 7.75 per cent, 8 per cent and 6.25 per cent payable half yearly in the three currencies respectively.

The investor will have the option of receiving the interest on a cumulative basis on maturity and the principal and interest will be fully repatriable in respect of non-resident holders.

The bonds could be held by NRIs jointly with resident Indians and could be gifted to resident Indians or transferable between NRIs and OCBs.

The bonds will be launched on August 5 at major overseas centres for a period of 30 days, but could be closed earlier depending upon the response.

The road shows and campaign are scheduled to commence from July 24.

''The floating of bonds is a result of our commitment for financing the development of long-term infrastructure projects while keeping the cost of raising funds at lower levels with ready availability,'' said SBI Chairman M S Verma.

Asked about the risk factors related forex fluctuation and interest rates, Verma said, ''We have structured the borrowing programme in such as way that risks would be shared among three basic partners --banks, project owners and the Union government which is the guarantor to the bonds.''

UNI