RBL Bank, BoM, UCO Bank and BoI Plan Overseas Fundraising

RBL Bank, Bank of Maharashtra, UCO Bank and Bank of India Line Up Overseas Fundraising After FCNR(B) Window Closes

RBL Bank, Bank of Maharashtra, UCO Bank and Bank of India are preparing to raise funds in overseas markets as Indian lenders begin adjusting their foreign-currency funding structures following the closure of the special FCNR(B) deposit mobilisation window.

RBL Bank and Bank of Maharashtra are the furthest advanced, with both lenders marketing five-year dollar bonds and potentially looking to raise:

$300 million to $500 million each.

Both banks have completed investor roadshows and could price their transactions depending on market conditions.

UCO Bank and Bank of India are also preparing for offshore fundraising, although their plans are at an earlier stage.

The moves come after Indian banks mobilised roughly:

$127 billion through Foreign Currency Non-Resident (Bank), or FCNR(B), deposits

under the special framework that closed for new deposits on:

August 31, 2026.

The overseas bond plans are primarily about refinancing and better matching liabilities rather than simply raising incremental growth capital.

RBL Bank and Bank of Maharashtra Move Closest to Dollar Bond Sales

RBL Bank and Bank of Maharashtra are understood to be in the final stages of marketing their proposed offshore bond offerings.

Both are seeking:

five-year funding.

The anticipated transaction size is approximately:

$300 million to $500 million for each lender.

Investor roadshows have already been conducted, giving the banks an opportunity to assess appetite, pricing expectations and demand from international fixed-income investors.

If market conditions remain favourable, pricing could take place relatively quickly.

RBL Establishes $1 Billion MTN Programme

RBL Bank has established a:

$1 billion Medium Term Note programme.

An MTN programme gives a bank a flexible framework for issuing bonds in international markets without creating a completely new issuance structure every time it seeks funding.

The programme does not mean RBL will immediately raise the full $1 billion.

Instead, it creates capacity to issue individual tranches depending on:

funding requirements,

market conditions,

pricing,

and investor demand.

Its first planned transaction under the programme could be in the $300–500 million range.

Bank of Maharashtra Activates $500 Million MTN Programme

Bank of Maharashtra has meanwhile activated a:

$500 million MTN programme.

The state-owned lender has indicated in fundraising documents that proceeds can be used to:

meet the funding requirements of its foreign offices or branches

and:

support general banking purposes

in accordance with RBI regulations.

Like RBL Bank, Bank of Maharashtra is seeking longer-tenor funding to improve the maturity profile of foreign-currency liabilities raised during the FCNR(B) mobilisation period.

These Could Be First Offshore Bond Sales for Both Banks

The proposed transactions would represent the first international bond issuances for:

RBL Bank

and:

Bank of Maharashtra.

That makes the fundraising strategically significant beyond the immediate refinancing requirement.

Successful issuance would establish each bank with global debt investors and create a reference point for future offshore borrowing.

A strong first transaction can make subsequent international fundraising easier by creating:

investor familiarity,

a pricing benchmark,

and an established credit history in global bond markets.

UCO Bank and Bank of India Also Prepare MTN Programmes

Two other state-owned lenders:

UCO Bank

and:

Bank of India

have also secured board approval for offshore fundraising.

Each bank has approved plans to raise up to:

$1 billion

through separate Medium Term Note programmes.

Their transactions are less advanced than those of RBL Bank and Bank of Maharashtra.

Both still need to assess investor sentiment and determine the appropriate timing and structure for any issuance.

Bank of India Starts Non-Deal Roadshow

Bank of India has begun preparing investors through a:

non-deal roadshow.

The roadshow started in:

Hong Kong

as the lender evaluates potential demand for an international bond offering.

A non-deal roadshow does not guarantee an immediate issuance.

Instead, banks use such meetings to communicate:

financial performance,

credit strategy,

funding plans,

and balance-sheet positioning

to institutional investors.

The feedback can help determine whether a transaction should proceed and at what pricing.

FCNR(B) Window Closed on August 31

The immediate backdrop to the fundraising is the closure of the special FCNR(B) deposit window.

The facility generated unusually large foreign-currency inflows into Indian banks.

By August 31, the RBI reported FCNR(B) mobilisation of approximately:

$127.22 billion.

The scale significantly exceeded early market expectations.

Banks offered attractive rates to non-resident depositors while benefiting from a special RBI foreign-exchange swap arrangement that reduced currency-hedging costs.

RBI Swap Facility Remains Available Until September 11

Although the deposit mobilisation window closed on August 31, banks can continue using the RBI's associated swap facility for eligible deposits already contracted until:

September 11, 2026.

This distinction matters.

The FCNR(B) deposit window itself has ended.

However, operational settlement and swapping of qualifying flows can continue for a limited period.

Banks are therefore simultaneously completing the special-window transactions while planning how to manage the resulting liabilities over the longer term.

Why Banks Need Overseas Refinancing

Some banks used short-term foreign-currency borrowings to provide leverage or interim financing connected with FCNR(B) deposits.

Those short-term loans can create a maturity mismatch.

For example, a bank may hold a five-year FCNR(B) deposit while the borrowing used to support the transaction matures much earlier.

Replacing short-term funding with:

five-year bonds

creates a better match between:

assets,

liabilities,

and funding maturities.

This reduces refinancing risk.

Asset-Liability Matching Is Central to the Exercise

The planned bond issuances are therefore fundamentally an:

asset-liability management exercise.

Banks continuously monitor whether the maturity profile of their assets and liabilities is aligned.

Large mismatches can create liquidity risks.

If a short-term liability matures while the underlying asset remains outstanding, the bank must refinance that liability.

Longer-term overseas bonds can reduce the frequency of this refinancing requirement.

RBL Bank Raised $3.4 Billion Through FCNR(B)

RBL Bank was one of the notable beneficiaries of the special deposit framework.

The bank mobilised approximately:

$3.4 billion

through the FCNR(B) window by the end of August.

That was a particularly large amount relative to the size of the bank's balance sheet.

RBL also provided approximately:

$1.08 billion

in loans through its international banking unit against the deposits.

The scale of mobilisation makes liability management especially important for the lender.

Emirates NBD Relationship Supported RBL Mobilisation

RBL Bank has highlighted support from its promoter:

Emirates NBD

and related entities in mobilising deposits through the UAE-India financial corridor.

The relationship helped RBL reach non-resident Indian customers and international liquidity pools.

That connection could also support RBL's broader international funding strategy as it develops its offshore investor base.

RBL Had Previously Considered a $500 Million Bond Issue

RBL Bank had earlier considered raising approximately:

$500 million

through an overseas bond issue.

Those plans were subsequently put on hold.

The establishment of the new $1 billion MTN programme gives the lender a more flexible framework for returning to international capital markets.

The proposed five-year transaction could effectively revive that offshore funding strategy under a more structured programme.

FCNR(B) Mobilisation Far Exceeded Expectations

The scale of the special deposit mobilisation surprised markets.

Initial expectations had centred around:

$40–50 billion

or somewhat higher estimates.

Actual inflows exceeded:

$127 billion.

A significant portion arrived during the final days of August as banks accelerated mobilisation before the deadline.

That created both advantages and new balance-sheet management challenges.

Private Banks Captured Nearly Half the Deposits

Private-sector banks accounted for the largest share of FCNR(B) inflows.

Industry estimates put private-bank mobilisation at approximately:

$61 billion

or close to:

47% of the total.

Public-sector banks collected around:

$37 billion,

while foreign banks accounted for approximately:

$32 billion.

This demonstrates how aggressively private lenders competed for the special funding opportunity.

ICICI Bank Was Among Largest Mobilisers

ICICI Bank was one of the largest individual participants, mobilising approximately:

$17.88 billion.

HDFC Bank was estimated to have raised around:

$12 billion,

while State Bank of India mobilised approximately:

$10 billion.

RBL Bank's $3.4 billion mobilisation was smaller in absolute terms but significant relative to its balance sheet.

Deposits Were Attractive Because Hedging Costs Fell

FCNR(B) deposits normally expose banks to currency-management considerations.

Under the special scheme, the RBI absorbed significant foreign-exchange hedging costs through the swap arrangement.

That allowed banks to offer non-resident customers comparatively attractive interest rates while keeping their own funding economics competitive.

Rates on some three-to-five-year FCNR(B) deposits were in the:

6–7% range.

FCNR(B) Deposits Avoid CRR and SLR Requirements

Another advantage is that FCNR(B) deposits generally do not attract the same:

Cash Reserve Ratio

and:

Statutory Liquidity Ratio

requirements as conventional domestic deposits.

That can make them more efficient funding instruments for banks.

The combination of:

attractive pricing,

reduced hedge costs,

and regulatory treatment

helped drive the extraordinary mobilisation.

Funding Surge Helped Narrow Credit-Deposit Gap

Indian banking had been dealing with credit growth running ahead of deposit growth.

Around mid-August, system credit growth was approximately:

18.3% year-on-year

compared with deposit growth of around:

14.7%.

The FCNR(B) inflows helped narrow this gap by significantly expanding the deposit base.

That gave banks more funding capacity to support lending.

Overseas Bonds Extend the Funding Profile

The next phase is not about attracting more FCNR(B) deposits under the closed special scheme.

Instead, banks are looking to optimise the funding already created.

Dollar bonds can provide:

longer maturity,

stable offshore funding,

and diversified investor exposure.

This can reduce dependence on short-term bilateral loans or temporary financing arrangements.

Dollar Funding Also Diversifies Liability Sources

Indian banks traditionally rely heavily on:

domestic deposits.

International bond markets provide an additional funding source.

Diversification can improve resilience because banks are not dependent on a single pool of capital.

However, offshore borrowing introduces other risks, including:

currency exposure,

global interest rates,

and refinancing conditions.

Banks therefore need to carefully balance the cost and benefits.

Global Bond Pricing Will Determine Timing

The four lenders are not guaranteed to issue immediately.

Offshore bond markets can change quickly.

Pricing depends on:

US Treasury yields,

global credit spreads,

investor sentiment,

India risk perception,

bank-specific credit quality,

and currency volatility.

If spreads widen sharply, banks may delay issuance.

That explains why RBL Bank and Bank of Maharashtra are waiting for suitable market conditions despite having completed roadshows.

First-Time Issuers May Pay a Premium

Because RBL Bank and Bank of Maharashtra have not previously sold international bonds, investors may initially demand a somewhat higher yield than for more established issuers.

This is commonly referred to as a:

new-issue premium.

Once an issuer builds a track record, future bonds can sometimes be priced more efficiently.

The first deal therefore has strategic importance in establishing a benchmark.

Public-Sector Banks Benefit From Sovereign Linkage

Bank of Maharashtra, UCO Bank and Bank of India are state-owned lenders.

That government ownership can influence how international investors assess credit risk.

While their bonds are not automatically sovereign obligations, investors often consider the relationship with the Indian government when evaluating:

creditworthiness

and:

default risk.

This can support investor demand, particularly when the banks' balance sheets are improving.

Indian PSU Bank Credit Profiles Have Improved

Public-sector banks have undergone a substantial financial improvement over recent years.

Asset quality has strengthened.

Profitability has improved.

Capital levels are healthier.

These trends can make PSU bank bonds more attractive to offshore investors than during periods when bad loans were elevated.

The timing of the proposed fundraising therefore coincides with stronger sector fundamentals.

GIFT City Is Becoming Important for Offshore Funding

The fundraising plans also reflect the growing role of:

GIFT City International Financial Services Centre.

Indian banks increasingly use their International Banking Units at GIFT IFSC to:

raise foreign currency,

lend overseas,

issue bonds,

and manage cross-border funding.

As of August 31, IBUs operating in GIFT City had sanctioned more than:

$54 billion

under the RBI swap framework.

This shows how rapidly the platform is becoming integrated into India's international banking system.

International Banking Units Increase Funding Flexibility

IBUs allow Indian lenders to operate more efficiently in global currencies.

They can support:

foreign-currency lending,

trade finance,

cross-border banking,

and offshore capital raising.

For banks expanding internationally, these units provide a bridge between domestic balance sheets and global capital markets.

The FCNR(B) programme has accelerated their use.

Large FCNR Inflows Also Created Excess Rupee Liquidity

The deposit surge did not only strengthen bank funding.

It also created significant:

rupee liquidity

in the domestic financial system.

When banks swapped foreign-currency deposits with the RBI, they received rupees.

The scale of the inflows contributed to a very large liquidity surplus.

That has forced the RBI to consider additional liquidity-absorption measures.

RBI Has Been Managing Liquidity Surplus

The central bank has used tools such as:

variable-rate reverse repo operations

and:

foreign-exchange swaps

to absorb excess liquidity.

The issue demonstrates how successful the FCNR(B) programme became.

A scheme originally designed to strengthen foreign-currency funding produced such large inflows that liquidity management itself became a policy challenge.

Overseas Fundraising Is a Post-FCNR Normalisation Step

The four banks' offshore bond plans should therefore be viewed as part of a broader normalisation process.

During the special window, the priority was:

rapid deposit mobilisation.

After closure, the focus shifts toward:

maturity management,

cost optimisation,

and refinancing.

Banks need to transform temporary or short-term funding structures into more stable long-term liabilities.

Five-Year Maturity Matches Deposit Tenors Better

Much of the FCNR(B) mobilisation occurred in:

three-to-five-year deposits.

RBL Bank and Bank of Maharashtra are now seeking:

five-year bonds.

That alignment is deliberate.

A five-year bond can more closely match the maturity of the related deposit liabilities and lending assets.

This reduces the risk of having to refinance funding before the underlying balance-sheet exposure matures.

MTN Programmes Give Banks Flexibility

Medium Term Note programmes are particularly useful in this environment.

They allow banks to raise money in multiple tranches over time.

A lender with a $1 billion MTN programme might issue:

$300 million today,

another tranche later,

and additional debt when market conditions improve.

This is more flexible than raising the full amount in one transaction.

UCO and Bank of India May Follow Later

RBL Bank and Bank of Maharashtra appear closest to actual issuance.

UCO Bank and Bank of India are likely to move after evaluating:

pricing,

investor appetite,

and market response to earlier deals.

If the first transactions are well received, that could encourage the other banks to accelerate issuance.

Conversely, poor market conditions could lead them to postpone.

Multiple Bank Issues Could Create a New Offshore Supply Wave

If all four banks proceed, international investors could see a meaningful new supply of Indian bank debt.

RBL Bank and Bank of Maharashtra alone could raise up to:

$1 billion combined

if both issue at the top end of the anticipated range.

UCO Bank and Bank of India have each approved MTN programmes of up to:

$1 billion.

The programmes represent capacity rather than confirmed issuance amounts, but they show the potential scale of offshore funding.

Investor Demand Will Be Closely Watched

The transactions will provide an important test of global appetite for Indian financial-sector credit.

Strong orders could indicate that investors remain comfortable with:

Indian banking fundamentals,

economic growth,

and sector credit quality.

Weak demand or high pricing would suggest that international markets remain cautious.

The results could influence future fundraising plans across other Indian lenders.

Conclusion

RBL Bank, Bank of Maharashtra, UCO Bank and Bank of India are preparing overseas fundraising programmes as they rebalance foreign-currency liabilities following the closure of the RBI-supported FCNR(B) mobilisation window.

RBL Bank and Bank of Maharashtra are the most advanced, with both marketing five-year dollar bonds of roughly $300–500 million each after completing investor roadshows.

RBL has established a $1 billion MTN programme, while Bank of Maharashtra has activated a $500 million programme. UCO Bank and Bank of India have separately received board approval for $1 billion MTN programmes, with Bank of India beginning a non-deal investor roadshow in Hong Kong.

The fundraising follows an extraordinary period in which Indian banks mobilised approximately $127.22 billion in FCNR(B) deposits by August 31, 2026 under the special RBI framework.

The next challenge is to convert some of the short-term funding used during that mobilisation into longer-duration liabilities that better match the maturity of the deposits and associated assets.

For Indian banks, the planned dollar bonds therefore represent less a fresh funding boom than the next stage of balance-sheet management after one of the largest foreign-currency deposit mobilisation exercises in the country's banking history.