SBI raises $1 billion from Japanese lenders

Country’s largest lender, State Bank of India (SBI) is raising a loan up to $1 billion from a group of Japanese lenders led by Japan Bank for International Cooperation (JBIC), it said in a release on Wednesday. The proceeds will likely promote fund business operations of Japanese automobile manufacturers in India.

While the sovereign-backed JBIC will extend $600 million, the rest will be funded by other syndication partners including MUFG Bank, SMBC, Mizuho Bank, Shizuoka Bank and Bank of Yokahama.

“This will assist in achieving our Prime Minister’s vision of making India ‘Atmanirbhar’,” C Venkat Nageswar, DMD (IBG), SBI. It is a historic occasion for both SBI and JBIC, as for the first time we are entering into an untied loan.”

“The friendship between India and Japan has a long history, rooted in spiritual affinity and strong cultural and civilizational ties,” he said.

Japan offers loans at relatively cheaper rates. It averaged around 2.4 percent from 1972 until 2020, shows an estimate. The company however did not mention interest rates on the loan. The tenor of the loan is likely to be less than five-year.

“As per one of the surveys, India is the most favoured nation for Japanese Investment,” said Masayuki Tanimoto , Managing Executive Officer of JBIC. This is one more step towards a strong relationship between Japan and India.”

JBIC is a policy-based financial institution, wholly owned by the Japanese government, with the objective of contributing to the sound development of Japan, the international economy and society.