Mumbai|Kolkata: State-owned UCO Bank plans to raise about $500 million through a combination of non-resident deposits and overseas borrowings, people familiar with the matter said. The Kolkata bank is among the lenders tapping into the central bank's concessional foreign currency funding window that has already attracted more than $32 billion of inflows.
With the proposed overseas foreign currency borrowing (OFCB), the UCO would join lenders such State Bank of India, ICICI Bank, HDFC Bank, Axis Bank, Bank of Baroda and Canara Bank, which have either tapped or are preparing to access the facility.
"We will raise $500 million through foreign currency non resident-bank (FCNR-B) and the OFCB routes," an official at the UCO Bank said. "The bank continuously explores various options for raising long-term and cost-effective funds, in line with its business and regulatory requirements," said the official, who declined to be named.
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The window, introduced on June 5 to boost dollar inflows and strengthen foreign exchange reserves, allows banks to swap eligible overseas borrowings with the central bank at concessional rates, significantly lowering their cost of funds.
According to Reserve Bank of India (RBI) Governor Sanjay Malhotra, the concessional window had attracted around $32 billion of inflows in about 45 days. FCNR(B) deposits have led the tally so far.
The mobilisation has already exceeded the roughly $26 billion raised during the 2013 FCNR(B) deposit scheme, making it one of the fastest foreign currency deposit drives in India's banking history.
