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Bank of India Raises Rs 10,000 Crore: How Infrastructure Bonds Fuel Growth

Bank of India has successfully raised a hefty sum of Rs 10,000 crore by issuing infrastructure bonds. This move is aimed at funding long-term projects in key areas like infrastructure and affordable housing. In related banking news, Union Bank of India has slashed interest rates on several retail loan products. These rate cuts are a direct response to the RBI's recent monetary policy easing.

Key Points: Bank of India Raises Rs 10,000 Crore via Infrastructure Bonds

  • Bank of India raised Rs 10,000 crore via long-term infrastructure bonds at 7.23% interest
  • The bond issue was oversubscribed, receiving bids worth Rs 15,305 crore
  • Funds will finance infrastructure and affordable housing per RBI guidelines
  • Union Bank of India cut home, vehicle, and personal loan rates significantly
2 min read

Bank of India raises Rs 10,000 crore via infrastructure bonds

Bank of India raises Rs 10,000 crore via infrastructure bonds at 7.23% to fund long-term projects. Union Bank also cuts retail loan rates.

"The funds raised... will be used to finance long-term projects in infrastructure sub-sectors and affordable housing. - Bank of India"

New Delhi, Dec 23

Bank of India on Tuesday raised Rs 10, 000 crore through the issuance of long-term infrastructure bonds at an interest rate of 7.23 per cent per annum.

The fund-raising was carried out through the NSE Electronic Bidding Provider Platform.

The base issue size was Rs 5,000 crore, with an additional green shoe option of Rs 5,000 crore.

The issue received strong investor interest, with the bank getting 83 bids worth Rs 15,305 crore. Out of these, 37 bids amounting to Rs 10,000 crore were accepted.

The bank said the funds raised through these long-term bonds will be used to finance long-term projects in infrastructure sub-sectors and affordable housing, in line with Reserve Bank of India (RBI) guidelines. However, it clarified that the money is not earmarked for any specific project.

Meanwhile, state-owned Union Bank of India has announced a significant reduction in interest rates on select retail loan products, including home loans, vehicle loans and personal loans. The revised rates came into effect from December 18.

Under the revision, home loan interest rates have been reduced by 30 basis points and now start at 7.15 per cent.

Vehicle loan rates have been cut by 40 basis points and now begin at 7.50 per cent. Personal loan borrowers have received the biggest relief, with interest rates reduced by up to 160 basis points, bringing the starting rate down to 8.75 per cent.

In addition to the base rate cuts, the bank is also offering an extra concession of 0.10 per cent per annum on eligible green finance home loans and vehicle loans.

The rate reduction follows the Reserve Bank of India’s Monetary Policy Committee decision to cut the repo rate by 25 basis points to 5.25 per cent on December 5.

This was the fourth repo rate cut in 2025, taking the total reduction in the policy rate to 125 basis points during the year.

Union Bank of India said the move is aimed at supporting homebuyers, vehicle buyers and personal loan customers by lowering borrowing costs, while continuing to follow prudent lending practices.

The bank added that it is among the first in the sector to respond to the recent monetary easing, with the objective of improving affordability for retail borrowers, subject to eligibility and credit norms.

- IANS

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Reader Comments

P
Priya S
Great news about the loan rate cuts from Union Bank! A 30 bps reduction on home loans is very welcome. My husband and I have been looking to buy our first flat in Pune, and every little bit helps. The green finance concession is a nice touch too for eco-friendly homes.
R
Rohit P
While the infrastructure bond issue is positive, I hope there is strict oversight on how these 10,000 crores are deployed. "Not earmarked for any specific project" sounds a bit vague. We've seen funds get delayed or misallocated before. Transparency is key.
S
Sarah B
The personal loan rate cut of up to 160 basis points is massive! That's a significant relief for middle-class families dealing with medical emergencies or education costs. It's good to see banks passing on the RBI's repo rate cuts to consumers so quickly.
V
Vikram M
This is all part of a positive cycle. Lower repo rate → cheaper funds for banks → cheaper loans for us → more spending and investment → growth. Hope other banks follow Union Bank's lead. More competition will benefit the common man the most.
K
Karthik V
The 7.23% rate on the infrastructure bonds seems reasonable. Attractive for long-term investors like pension funds. Financing affordable housing is a critical need in our cities. If executed well, this can have a real social impact beyond just financial metrics.

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