A recent press report said that the public sector bank IDBI has planned to raise around $ 200 million overseas fund through medium term notes from Switzerland market.
In his statement Mr. Melwyn Rego, the Executive Director of IDBI bank said that they have been observing the Switzerland market keenly and the Korean Exim bank has recently raised money from there. The bank would look forward to borrow from there when opportunity comes. However, he did not mention specifically about the time – frame for raising this amount.
Medium term note is a kind of debt instrument used by corporate or banks to raise funds from overseas market at cheaper rates. Usually a fixed rate of interest would be paid by the issuer to the subscriber at the time of maturity of the debt.
The bank which has a plan of raising $1.5 billion overseas fund through medium term notes has already raised around $400 million in the first part of this year. Most of the domestic banks are looking forward to raise their capital from Switzerland as a part of their diversification move.
So far in 2011 Union Bank of India has raised 160 million Swiss franc (CHF) and State Bank of India has raised CHF 325 million in the same way. Exim Bank has also raised around CHF 175 million from Swiss market.
IDBI bank offers personalized banking and financial solutions to its clients in the retail (home loan, personal loan, vehicle loan, education loan etc.) and corporate banking arena through its large network of Branches and ATMs, spread across length and breadth of India.