ICICI joins Indian banks chasing dollar loans, swelling demand

ICICI Bank Ltd. announced a syndicated offshore loan valued at roughly $1.45 billion, sources said, as domestic banks increasingly tap foreign debt to benefit from a central‑bank scheme that cuts hedging expenses.

The country’s second‑biggest private bank initially secured a roughly $1 billion facility with Bank of America Corp., sources indicated, requesting anonymity. It is now expanding the transaction to include Mizuho Bank Ltd., Mashreqbank PSC and United Overseas Bank Ltd., the sources added.

The four‑year loan carries a spread of 110 basis points above the US Secured Overnight Financing Rate, sources noted. Additional banks could join the syndicate, potentially enlarging the facility while keeping the same pricing, two sources said.

The loan comes after the Mumbai‑based lender sold $1 billion of five‑year bonds last month, marking its first return to the international debt market in nearly ten years.

Spokespeople for ICICI Bank, Bank of America, Mizuho Bank and Mashreqbank did not respond right away to comment requests; UOB declined to comment. The International Financing Review was the first to break the story about the loan.

ICICI Bank’s planned borrowing contributes to a recent rise in offshore funding by Indian lenders. It follows Reserve Bank of India initiatives launched in June designed to draw foreign‑currency inflows and support the rupee, which has been weakened by the Iran conflict.

To lower hedging expenses, the RBI provides banks and state‑owned entities with a concessional foreign‑exchange swap facility at a fixed 1.5 % annual rate for an average tenor of three years or more, which is cheaper than prevailing market rates. The facility expires on December 31, prompting banks to hurriedly seek dollar funding to benefit from it.

From June 8, when the RBI swap facility opened, through the end of July, Indian banks have tapped roughly $2.58 billion in dollar‑denominated bonds and loans, according to the latest central‑bank figures.

ICICI Bank is also negotiating to raise an additional $500 million in offshore bonds to capitalize on the central‑bank facility, Bloomberg News reported earlier. The bank posted profit that exceeded forecasts for the quarter ended June, driven by loan‑book growth of nearly 20 %.

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Published on August 14, 2026