New Delhi, Mar 20 (PTI) State-owned Indian Bank on Thursday said it proposes to raise Rs 5,000 crore through long-term infra bonds to fund infrastructure sector projects.

The proposal in this regard was approved by the bank's board meeting on Thursday.

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The board approved for raising additional long-term Infrastructure Bonds, aggregating up to Rs 5,000 crore over and above Rs 10,000 crore already raised by the bank in the current FY 2024-25, in one or more tranches during the current or subsequent financial year, Indian Bank said in a regulatory filing.

The fundraising would be done at an opportune time based on the requirement for financing/refinancing of Infrastructure and affordable housing in compliance with applicable RBI guidelines and other laws, rules and regulations, it added.

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Domestic investors have shown a lot of interest in such bond issuance by banks, and many lenders have exercised this option for raising resources in the recent past.

The advantage of infrastructure bonds is that they are exempt from regulatory reserve requirements like the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR). So, infrastructure bond proceeds can be fully deployed for lending activities.

Banks have been preferring infrastructure bonds over AT-1 and Tier-2 bonds, as they are better priced.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)