HDFC Bank which offers as much as 6.25 per cent rate on some dollar deposits has drawn about $5.42 billion in FCNR money as of July 30.
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India’s private lenders, including the largest, HDFC Bank Ltd., are planning to raise up to $3 billion through dollar bonds or loans, according to people familiar with the matter, tapping a central bank facility which reduces the hedging costs for overseas borrowings.HDFC Bank plans to raise as much as $1 billion through a dollar bond sale, said the people, who asked not to be identified discussing private information. It’s in talks with foreign lenders to arrange the sale that could take place in the next few weeks, they said, adding that terms haven’t been finalized and could change.Four other Indian lenders — Federal Bank Ltd., Kotak Mahindra Bank Ltd., RBL Bank Ltd. and Yes Bank Ltd. — are separately considering raising between $250 million and $500 million each either through bonds or loans, the people said. All four have not been frequent issuers in the international dollar debt market.Representatives for HDFC Bank, Federal Bank, Kotak Mahindra, RBL Bank and Yes Bank did not respond to requests for comment.The plans by the banks are the latest evidence that Indian lenders have been responding to the Reserve Bank of India’s efforts to boost capital inflows to support the rupee. Indian banks have tapped the dollar bond market since the RBI swap facility began on June 8, raising $4.07 billion between then and August 11, according to data compiled by Bloomberg.But the central bank’s strategy to boost the currency — which hit a record low at near 97 against the dollar in May — has had a more muted impact compared to a similar scheme in 2013. The rupee has dropped 0.5 per cent in the first 46 days since the latest measures were announced, compared with a 7 per cent gain in the same period in 2013.The RBI has offered banks and state-run firms a concessional foreign exchange swap facility with a fixed annual rate of 1.5 per cent for an average maturity of at least three years, lower than current market costs. The window closes by December 31, and the rush among banks to raise dollars has been firing up India’s debt markets.State Bank of India, the nation’s biggest lender, may price on Tuesday a dollar-denominated five-year benchmark bond, a person familiar with the matter has said.If completed, it would be HDFC Bank’s second dollar bond issue since raising $750 million from a five-year debt sale in June. The Mumbai-based lender secured its tightest-ever spread on a dollar bond issue with that sale which was its first since 2024, underlining brisk investor demand despite recent governance issues it’s faced.The foreign currency non-resident window, which allows the country’s 35 million non-resident Indians globally to have forex deposit accounts at attractive rates,“is a great opportunity and we are focusing on that,” HDFC Bank Chief Executive Officer Sashidhar Jagdishan said at an earnings call last month. The window to tap dollar deposits ends on Sept. 30.But former RBI Governor Duvvuri Subbarao said in an interview that the central bank’s efforts are “too costly” and unlikely to stem the rupee’s weakness. FCNR deposits are “borrowed dollars” and have to be repaid at maturity, he added.HDFC Bank which offers as much as 6.25 per cent rate on some dollar deposits has drawn about $5.42 billion in FCNR money as of July 30, compared with $6.06 billion at its closest peer, ICICI Bank Ltd., according to central bank data.Published on August 11, 2026
