State-run lender Bank of India is preparing to raise up to $1 billion through a medium-term note programme, leveraging a Reserve Bank of India scheme to attract non-resident Indian deposits and reduce borrowing costs amid stiff competition among public sector banks.
Bank of India is preparing to tap the overseas debt market for as much as $1 billion through a medium-term note programme, as the state-run lender looks to capitalise on a temporary Reserve Bank of India scheme that is drawing foreign-currency deposits from non-resident Indians. The move comes as the bank seeks to widen its dollar funding base and trim borrowing costs at a time when several public sector lenders are competing for the same pool of NRI money.
According to data the finance ministry placed before the Lok Sabha, Bank of India mobilised $207.46 million in Foreign Currency Non-Resident-Bank deposits with three- to five-year maturities between June 5 and July 30. The lender is offering interest rates of 6% to 6.25% on smaller deposits and 6.25% to 6.50% on larger ones, depending on tenor, as it tries to attract fresh inflows under the RBI’s concessional swap window.
In a regulatory filing, the bank said the planned foreign-currency fundraising would be carried out in multiple tranches by the end of December 2026 through 3- to 5-year dollar bonds, issued via its GIFT City branch. The board is due to meet on August 14 to consider and approve the proposed medium-term note programme.
The initiative fits into a broader funding strategy. During FY26, Bank of India raised ₹2,500 crore through Tier II bonds in December 2025 and ₹10,000 crore through 10-year long-term infrastructure bonds later that month. The Economic Times has reported that the lender is also aiming to lower its overall funding cost by moving away from expensive bulk deposits, while other state-run banks have launched similar campaigns to raise foreign currency deposits and overseas borrowings before the RBI window closes.
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