RIB issue to raise over $ 2 billion

"If the subscription crosses the target of $2 billion, SBI may announce the closure of the issue. There is a growing feeling in the government that $2 billion to $2.5 billion may be the right amount," said sources.

State Bank is confident about collecting around $3-3.5 billion if the issue is kept open for more days. The hassles in marketing the issue in the US has affected the initialcollections. In the US, SBI was able to market the issue only in the county of New York. The issue is yet to get clearance in US counties. SBI is also not pressing hard enough for the clearance from other US counties because of the very little time left for the issue to close. Initially, the bank had targeted to collect about one fourth of the subscriptions from the United States.

Bankers say they are getting good response from the Gulf and the UK. “We are planning a early closing as the country is not needing more than $ 2.5 billion.” Due to good response, bankers fear that they will get more than what was targeted and after five years there would be trouble in retiring these costly debts.

SBI officials say that they are expecting a deluge of applications on Monday as many investors wait for the last day for filing their applications. “With already more than $ 1.16 billion in our kitty, we would not like to extend the date beyond Monday.”

The final decision would be taken by the finance ministerin consultation with the State Bank’s chief, M S Verma on Monday evening in New Delhi. The Indian government launched the Resurgent India Bond earlier this month in an effort to offset a possible slowdown of foreign exchange inflows soon after Washington imposed economic sanctions for nuclear tests conducted last May.

The bonds are denominated in three foreign currencies: the US dollar, UK Sterling and the DM and are targeted at expatriate Indians.

The proceeds of the funds would be used by the bank to finance the infrastructure sector which requires massive investments.