State-owned Bank of India (BoI) on Thursday said it plans to raise Rs 20,000 crore during the current fiscal via bonds to fund infrastructure projects.
The board approved the issuance of long-term infra bonds worth Rs 20,000 crore in 2025-26, BoI said in a regulatory filing.
Banks, including SBI, have been raising funds through bonds to secure funds that are solely dedicated to advancing various infrastructure development projects.
The advantage of infrastructure bonds is that they are exempt from regulatory reserve requirements, such as the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR). So, infrastructure bond proceeds can be fully deployed for lending activities.
Banks have been preferring infrastructure bonds over AT-1 and Tier-2 bonds, as they are better priced.
