ICICI Bank Launches $1.45 Billion Offshore Loan Amid RBI Push To Boost Dollar Funding

India’s second-largest private sector lender, ICICI Bank, has launched a syndicated offshore loan of around $1.45 billion, joining a growing list of Indian financial institutions seeking overseas funding. The move comes as banks look to benefit from a Reserve Bank of India facility designed to reduce the cost of hedging foreign-currency borrowings.

ICICI Bank Expands Offshore Borrowing

The Mumbai-based lender initially signed a loan agreement worth about $1 billion with Bank of America, before increasing the transaction through participation from other international lenders, including Mizuho Bank, Mashreqbank and United Overseas Bank, Moneycontrol reported.

The four-year facility carries a margin of 110 basis points over the US benchmark Secured Overnight Financing Rate (SOFR). Additional lenders could join the syndication, potentially increasing the overall size of the loan while keeping the same pricing.

The transaction follows ICICI Bank’s $1 billion five-year bond sale last month, marking its return to international debt markets after almost a decade.

RBI Facility Drives Dollar Funding Rush

ICICI Bank’s latest borrowing comes amid increased offshore fundraising by Indian banks following measures announced by the RBI in June.

The central bank introduced a concessional foreign-exchange swap facility to encourage foreign-currency inflows and support the rupee amid external pressures.

Under the facility, banks and state-owned companies can access foreign-exchange swaps at a fixed annual rate of 1.5%, provided the average maturity is at least three years.

The concessional window is available until December 31, prompting lenders to accelerate dollar-denominated fundraising.

Indian banks raised around $2.58 billion through dollar bonds and loans between June 8, when the RBI facility began, and the end of July, according to central bank data.

ICICI Bank had also been exploring an additional $500 million offshore bond issue to leverage the RBI facility. The lender recently reported stronger-than-expected quarterly earnings, supported by nearly 20% growth in its loan portfolio.