Decision on $500 mn overseas bonds issue soon: SBI

State Bank of India, the country's largest lender, which was recently downgraded by ratings agency Moody's, will decide on an over $500 million bonds issue next month.

"That's a call we would be taking in November... Whether to go for it at all, and if we do decide to go in, then the extent of the amount," the bank's Managing Director for International Banking, Hemant Contractor, said.

He said it would be a "benchmark issue", which normally means the minimum issue size would be of at least $500 million.

The bank had earlier announced it would double its MTN borrowings to shore up the tier-II capital to $10 billion this fiscal.

SBI Chairman Pratip Chaudhuri had in September hinted at raising over $1 billion in November, but sounded sceptical following the downgrade by Moody's.

On October 4, Moody's Investors Service had cut the rating on SBI's financial strength to D+ from C- and pointed to issues with asset quality and lower capital adequacy.

Ratings downgrades usually increase borrowing costs for financial institutions.

Contractor said the rates had gone up in international markets due to lower liquidity conditions, but did not answer when asked if the downgrade would have a bearing on the bank's plans.