Key Points

The bank informed stock exchanges that the decision was taken at the meeting of the Board of Directors earlier today.

In February this year, Bank of India had raised 10 years Infrastructure Bonds of Rs 2,690 crore at 7.50 per cent per annum.

Other Public sector banks are also lining up fund-raising plans. Union Bank of India's board has approved raising of Rs 6,000 crore through a mix of equity an debt instruments. Rs 3000 crore will be raised through equities or rights issue and Rs 3000 Crore via AT1 and Tier-2 binds.

Infrastructure bonds typically have a long tenor and the proceeds are utilised by banks to fund long-term infrastructure projects.

Reportedly, banks are increasingly tapping more resources via infrastructure bond issuances in the backdrop of deposit growth lagging credit growth.

Public sector banks (PSBs) reportedly accounted for a majority of the total infra bond issuances last financial year.

By 2030, India's economy is expected to expand to USD 7 trn from existing USD 3.9 trn. This is equivalent to nearly 2x expansion in the next 6 years. Infrastructure investments will play a pivotal role in enabling economic growth, as statistically, they are highly correlated.

As per a recent analysis by Knight Frank India, a 1 per cent increase in infrastructure investment increases the economy's GDP by 0.60 per cent.

To achieve an economic size of USD 7 trn by 2030, India's economy, according to Knight Frank, is required to grow at a CAGR of 10.1 per cent between 2024- 2030. Notably, this is the average annual growth China witnessed between 2000-10.

To achieve a USD 7 trillion economy, India would require infrastructure investment worth USD 2.2 trillion until 2030.

Bank of India shares closed at Rs 116.91 up 0.65 percent today at NSE.

- ANI