The bank is allowed to collect funds in one or more branches in the current or next financial year. The bank said in a regulatory filing on Wednesday that the fund increase would be based on the need for credit as well as the need for infrastructure and cheap housing.
In the current financial year, many banks, especially public sector banks, tapped the market to raise funds through infrastructure bonds to support credit growth amid intense competition to increase deposits.
Recently, in February, the Bank of Maharashtra and Punjab National Bank received Rs 1,612 crore and Rs 1,612 crore and Rs. 2,950 crore was raised.
According to the Reserve Bank of India’s rules, banks can use funds raised by long -term infrastructure bonds to lend and lend to its sub -sectors only for infrastructure and its sub -sectors. The maturity of these bonds should be at least seven years.
Long -term bonds are a cheap source of funds for banks because unlike deposits, funds raised by these bonds are exempted for regulatory reserves such as cash reserve ratio and statutory liquidity ratio, experts said.
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