Bank Of Baroda Approves Raising Up To Rs 10,000 Crore Via Infra Bonds

The board of Bank of Baroda on Wednesday approved raising up to Rs 10,000 crore through the issuance of long term bonds, the lender said in an exchange filing.

The bonds will be used for financing of infrastructure and affordable housing in single or multiple tranches during the current financial year and beyond if found feasible, according to a media statement.

So far in the current financial year, Bank of Baroda has raised Rs 10,000 crore through two infrastructure bonds. This has come as banks have become more aggressive at tapping into such avenues because of slower deposit growth in the system.

Banks and financial institutions raise money through infrastructure bonds to finance long-term infrastructure projects. These bonds have a minimum maturity of seven years and are eligible for some regulatory exemptions, such as the mandatory requirements of the statutory liquidity ratio and the cash reserve ratio. Affordable housing loans can also be used to finance infrastructure bonds.