An IDBI Bank executive confirmed the move but declined to elaborate.
IDIBI Bank executives said the lender would ensure that customers and investors were serviced without disruption.
Sources said the buyback activity would be spread over quarters and would be done in small tranches for reasons of absorption. They added that these bonds were part of liabilities in the bank’s books.
IDBI Bank’s Dubai branch was its first overseas branch at the Dubai International Financial Centre (DIFC). The lender also has an IFSC Banking Unit (IBU) at the International Financial Services Centre at the GIFT City.
Through these branches, the lender provides a range of corporate banking services, including external commercial borrowings (ECB), foreign currency loans (FCL), syndication of ECB/FCL and trade finance products to cater to requirements of their Indian clients for their domestic and international ventures.
IDBI Bank also recalled its Tier-I bonds. It, along with Bank of Maharashtra, Oriental Bank of Commerce and Dena Bank, recalled bonds worth Rs 109 billion after the government prompted them to do so. The move was expected to save interest costs.
The bank has offloaded its stake in financial institutions such as the National Stock Exchange, Clearing Corporation of India and Small Industries Development Bank of India. The lender sold a commercial building for Rs 9 billion, taking the total non-core asset sales to over Rs 41 billion in 2017-18.
The government has provided recapitalisation worth Rs 106.1 billion to IDBI Bank, the highest among public sector banks. But these efforts seem insufficient, given the bank’s high net non-performing assets (NPAs) worth Rs 293.5 billion as of December 2017, which is 16 per cent of its net advances.