A recent press report from SBI said that the unappealing returns and moderation in growth has made the bank to postpone the plans of raising funds overseas. The country’s largest lender had planned to raise funds amounting to $1 billion by means of medium-term notes. But, it has been deferred on account of lack in economic stability.
According to Mr. Pratip Chauduri, the Chairman of SBI, there is a steep fall in US treasury yields currently whereas the investors want to earn the same rate of return of 4.5 per cent as before. He said that the investors were not interested in knowing the trends of the treasury yields.
Mr. Hemant Contractor, the Deputy Managing Director, international banking, SBI said that the downgrading of SBI from D+ to C- by Moody credit rating agency last week may lead to higher borrowing rates on overseas debt program.
Sources said that once banks start their overseas operations then it will depend on medium- term notes for raising funds for their overseas business. Mr. Chaudri, on account of doubling the fund raising limit from $5 billion to $10 billion through medium-term notes said that once Indian companies establish overseas operations they start exercising fund raising through medium-term notes.
Earlier in a report the bank has said that its home loans have grown over the last six months, but it was comparatively lesser than the period last year. The bank expected its home loan segment to grow roughly around 20%, but it would be able to record only around 16-18% growth.