Did Bank of India Raise Rs 10,000 Crore Through Infrastructure Bonds?
Synopsis
In a strategic move, Bank of India has successfully raised Rs 10,000 crore through long-term infrastructure bonds, enticing investors with a 7.23% interest rate. This funding initiative is aimed at enhancing infrastructure projects and affordable housing, showcasing the bank's proactive approach in a changing financial landscape.
Key Takeaways
Bank of India raised Rs 10,000 crore through infrastructure bonds.
Interest rate set at 7.23% per annum .
Strong investor interest with 83 bids received.
Funds to support infrastructure and affordable housing .
Union Bank of India also reduced interest rates on loans.
New Delhi, Dec 23 (NationPress) On Tuesday, Bank of India successfully raised Rs 10,000 crore by issuing long-term infrastructure bonds, offering an interest rate of 7.23 percent per annum.
This capital-raising initiative was executed via the NSE Electronic Bidding Provider Platform.
The base issue was set at Rs 5,000 crore, with an additional green shoe option also valued at Rs 5,000 crore.
Investor interest was robust, as the bank received 83 bids totaling Rs 15,305 crore. Out of these, 37 bids amounting to Rs 10,000 crore were accepted.
The funds acquired through these long-term bonds will be allocated to finance long-term projects in infrastructure sub-sectors and affordable housing, adhering to the guidelines set forth by the Reserve Bank of India (RBI). However, the bank clarified that the funds are not designated for any specific project.
In a parallel development, state-owned Union Bank of India has announced a noteworthy reduction in interest rates on select retail loan products, covering home loans, vehicle loans, and personal loans. The updated rates took effect on December 18.
As part of this revision, home loan interest rates have been decreased by 30 basis points, now starting at 7.15 percent.
Vehicle loan rates have been reduced by 40 basis points, beginning at 7.50 percent, while personal loan borrowers have benefited the most, with interest rates slashed by up to 160 basis points, bringing the starting rate down to 8.75 percent.
Alongside the base rate adjustments, the bank is offering an additional concession of 0.10 percent per annum on eligible green finance home loans and vehicle loans.
This rate reduction follows the Reserve Bank of India’s Monetary Policy Committee decision to lower the repo rate by 25 basis points to 5.25 percent on December 5.
This marks the fourth repo rate reduction in 2025, totaling a 125 basis points decrease in the policy rate throughout the year.
Union Bank of India stated that this move aims to support homebuyers, vehicle buyers, and personal loan customers by reducing borrowing costs while maintaining prudent lending practices.
The bank emphasized that it is among the first in the industry to respond to the recent monetary easing, striving to enhance affordability for retail borrowers, subject to eligibility and credit standards.
Point of View
I believe this development reflects the dynamic nature of India's financial sector. The substantial interest shown by investors indicates confidence in the Bank of India's strategy and its commitment to supporting infrastructure development, which is crucial for sustainable economic growth. This timely move can significantly enhance funding avenues for essential projects.
NationPress
20 Jun 2026
Frequently Asked Questions
What is the interest rate for the infrastructure bonds?
The bonds were issued at an interest rate of 7.23% per annum.
How much did Bank of India raise through these bonds?
Bank of India raised Rs 10,000 crore through the issuance of long-term infrastructure bonds.
What is the purpose of the raised funds?
The funds will be allocated to finance long-term projects in infrastructure sub-sectors and affordable housing.
What was the additional option in the bond issuance?
The bond issuance had an additional green shoe option of Rs 5,000 crore.
How many bids were received during the bond issuance?
The bank received 83 bids amounting to Rs 15,305 crore.
