State Bank of India (SBI) has approved a long-term fund-raising programme for the financial year 2026-27. The decision was taken in a meeting of the Executive Committee of the Central Board of the bank held on 12 May 2026.
SBI may raise up to US$ 2 Billion through single or multiple tranches. The fund raising will be done under Reg-S/144A through public offer and/or private placement of fixed or floating rate bonds. The bonds may be issued in US Dollar or any other major foreign currency during FY 2026-27.
Let’s understand these Bonds
The bonds mentioned by SBI are debt instruments through which the bank borrows money from investors for a fixed period.
When investors buy these bonds, they are essentially lending money to SBI, and in return, SBI promises to pay interest regularly and repay the principal amount after the bond matures.
These bonds are usually purchased by large investors such as foreign banks, mutual funds, insurance companies, pension funds, and institutional investors.
SBI said it may issue both fixed rate bonds and floating rate bonds. In fixed rate bonds, the interest rate remains the same throughout the tenure of the bond.
For example, if SBI issues a bond with a 6% annual interest rate, investors will continue receiving 6% every year until maturity. In floating rate bonds, the interest rate changes according to market conditions or international benchmark rates such as SOFR.
This means the return can increase or decrease over time.The bank also mentioned that the bonds will be issued under Reg-S/144A. These are international regulations that allow companies and banks to raise money from foreign investors.
Reg-S allows bonds to be sold outside the United States, while Rule 144A allows qualified institutional buyers in the US to invest in these bonds.
This helps SBI access a larger global investor base.SBI may issue the bonds through public offers or private placements. In a public offer, bonds are offered openly to many investors in the market. In private placement, the bonds are sold directly to selected institutional investors.
The bonds may be issued in US Dollars or other major foreign currencies depending on market conditions and investor demand.
By issuing these bonds, SBI can raise large amounts of long-term funds from international markets.
The money can then be used for lending, business expansion, maintaining liquidity, strengthening capital position, and supporting overall banking operations.
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