BoI to raise money through MTN

BoI,which had unveiled MTN programme of raising 5 bn in 2005,has raised 1.475 bn till now.

Public-sector lender Bank of India BoI will raise foreign currency loan under the medium term note MTN programme as soon as the global economic situation improves,a top executive has said.

8220;We will enter the market for raising foreign currency loan as soon as the situation improves on the global economic front. However,there is no such plan as of now,8221; a top bank official,who wished not to be named,told said.

The state-run lender,which had unveiled an MTN programme of raising around USD 5 billion in 2005,has raised USD 1.475 billion till now.

Referring to the amount likely to be raised,the official said it was difficult to peg a specific quantity as it would depend on the prevailing economic situation.

8220;We may look at other currencies also,except dollar,to raise money through MTN programme.8221;

Earlier,the country8217;s largest lender State Bank of India SBI had said it would revive its international borrowing plans in the next three to four months,with improvement of the European situation.

SBI Managing Director Hemant Contractor has reportedly said that the bank could raise above USD 500 million through its international borrowing plan.

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Recently,another public-sector lender,Union Bank of India,filed an updated prospectus with the Singapore Stock Exchange for its USD 2 billion MTN programme,out of which the bank had already raised USD 565 million.

Last year,several banks deferred their plans of international borrowing due to risk aversion approach of European institutions towards emerging economies.

Also,lack of effective demand for foreign currency loans from Indian corporate houses,coupled with narrowing of spreads between domestic and international financing,had restricted Indian banks to raise money overseas.

However,the situation is likely to be better this year as European debt situation is expected to improve.

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8220;As euro-zone crisis is expected to improve this year,many banks are likely to opt for overseas borrowing for capital raising,8221; the official said.