ICICI Bank is exploring the global bond market to raise $500 million. This would be its first benchmark-sized US dollar bond issuance since December 2017.
The move comes as Indian banks face a domestic liquidity squeeze, with credit growth outpacing deposit growth. Banks are competing hard for low-cost retail rupee deposits to fund an ongoing corporate credit boom.
Domestic borrowing costs have risen as liquidity has tightened. Even after accounting for currency hedging costs, raising dollars overseas can work out cheaper than raising an equivalent amount domestically.
Tapping the offshore dollar bond market also diversifies ICICI Bank's funding base beyond domestic retail depositors, reducing reliance on one liability source in a volatile rate environment.
