Axis Bank Ltd, India's third-largest private lender, has signed a $500 million offshore loan with Mitsubishi UFJ Financial Group Inc., according to people familiar with the matter, underscoring rising demand for bank credit.
The three-year facility will be priced based on the secured overnight financing rate (SOFR) plus 85-basis point interest margin, the people said, asking not to be identified as the details are private. The bank plans to use the funds for lending and general business purposes, they said.
The loan is now being syndicated to a broader group of lenders, the people said.
The fundraising comes at a time when banks in India are facing challenges because loans are growing significantly faster than deposits. For instance, Axis Bank's loans expanded 19% to 12.3 trillion rupees ($130 billion) in the year ended March, while its deposits grew by only 14%, according to its data.
Axis Bank has secured the loan facility, with MUFG acting as the sole mandated lead arranger and bookrunner, Girish Vasnani, director in the capital markets group at the Japanese lender, said by email.
Axis Bank did not immediately reply to the request for comment.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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