HDFC Bank's unit in talks with global banks, seeks $300 mn in offshore loan

By Saikat Das

A unit of HDFC Bank Ltd., India’s largest private sector lender, is planning to borrow as much as $300 million, according to people familiar with the matter, as tighter rules by the nation’s central bank restrict domestic avenues. 
 

HDB Financial Services Ltd. is in talks with a group of global and local banks to finalise the terms, said the people, who asked not to be identified because the discussions are private. 

Non-banking finance companies are increasingly tapping credit market overseas after the Reserve Bank of India limited domestic funding sources for them. Manappuram Finance Ltd., Muthoot Finance Ltd. and Piramal Capital & Housing Finance Ltd. are among shadow financiers who have borrowed overseas this year.   

HDB Financial offers a range of secured and unsecured consumer loans. The debt’s tenor may range from three to five years, with the pricing linked to the Secured Overnight Financing Rate, the people said. The funds will be raised under the central bank’s external commercial borrowing route, which caps the interest rate at 500 basis points over the benchmark rate.

The final terms could change as the borrower aims to sign the deal bilaterally with one of the banks it is currently in talks with, the people said. 

HDB Financial did not respond to Bloomberg’s request for comment.