Indian Bank is planning to raise $400 million through external commercial borrowings (ECB) this week as it looks to take advantage of the Reserve Bank of India’s concessional borrowing window and support its business growth.

• Indian Bank plans to raise $400 million through ECBs this week and may raise another $600 million before the RBI’s December 31 deadline.
• The bank has already mobilised $1.5 billion through FCNR (B) deposits and expects the total to reach around $2 billion amid strong demand from NRIs.

The public sector lender could raise another $600 million through ECBs before the RBI’s December 31, 2026 deadline, taking its planned ECB fundraising to $1 billion. The bank is also targeting around $2 billion through Foreign Currency Non-Resident (Bank), or FCNR (B), deposits.

Indian Bank Looks to Tap Overseas Funding

Indian Bank MD and CEO Binod Kumar said the bank is considering raising $400 million through the ECB route as early as this week, with the overseas borrowing expected to come at a competitive rate.

“The bank is considering raising $400 million via the ECB route as early as this week...the overseas fund raise would come at a very competitive rate,” Kumar told PTI.

The lender could consider another $600 million after August, as the RBI’s special window for ECBs and overseas foreign currency borrowings remains available until the end of the calendar year.

The fundraising forms part of Indian Bank’s broader strategy to access overseas capital at favorable rates and support its lending and business expansion. Alongside the planned $1 billion ECB mobilization, the bank is targeting approximately $2 billion through FCNR (B) deposits.

Indian Bank has already raised $1.5 billion through FCNR (B) deposits, with Kumar highlighting strong participation from non-resident Indians.

“Indian Bank has already raised $1.5 billion from FCNR(B) deposits...we have seen good demand from NRIs. They are willing to put their money in such a product as it provides attractive returns...we hope it will touch $2 billion,” he said.

Strong Forex Inflows Prompt RBI Action

The bank’s fundraising plans come after stronger-than-expected participation in the RBI’s special foreign currency mobilization measures.

The central bank introduced its special USD-INR forex swap facility on June 8 to encourage FCNR (B) deposits, with the window initially scheduled to remain open until September 30. The facility for ECBs and overseas foreign currency borrowings remains available until December 31.

However, the RBI prematurely closed the FCNR (B) mobilization window on Friday, citing the encouraging response and strong foreign exchange inflows generated through the scheme.

According to RBI data, FCNR (B) deposits had attracted $52.3 billion from overseas customers as of August 13. Overseas foreign currency borrowings contributed $2.81 billion, while ECBs accounted for $1.74 billion.

Kumar said the stronger-than-expected FCNR (B) flows were one reason behind the RBI’s decision to close that facility earlier than scheduled. For Indian Bank, the remaining ECB window provides an opportunity to raise additional foreign currency funds before the December deadline.

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The fundraising plans also come as Indian Bank marks its 120th Foundation Day. On August 15, the lender inaugurated 15 branches across India and launched several customer-focused initiatives, including its cybersecurity mascot, IB CYBER CAPTAIN, and voice banking services in three languages.

“As we celebrate our Foundation Day alongside the 80th Independence Day, we reaffirm our commitment to strengthening financial inclusion, empowering communities and contributing meaningfully to India's journey towards a stronger, more inclusive and prosperous future of Viksit Bharat,” Kumar said.

With its overseas fundraising plans, branch expansion and digital initiatives, Indian Bank is positioning capital mobilization alongside broader efforts to expand access to banking services and support India’s economic development.