RBL Bank to Tap $1 Billion Foreign Bond Funds through EMTN Programme

RBL Bank has cleared a plan to raise up to $1 billion in foreign bond funds through an Euro Medium Term Note (EMTN) programme. The programme, which was approved by RBL Bank's board on Monday, will allow the bank to issue foreign-currency securities worth up to $1 billion from time to time through one or more transactions.

The fundraising will be subject to prevailing market conditions and applicable regulatory requirements. RBL Bank noted that the securities will not be offered or sold to any investor in India. The lender has delegated certain powers and authorities to its Borrowing Committee, enabling it to take necessary decisions related to the EMTN programme.

This plan comes after Emirates NBD Bank completed the acquisition of a majority stake in RBL Bank in June through a preferential issue of shares. As a result, Emirates NBD now holds 60% of RBL Bank's expanded share capital. The transaction was valued at around ₹26,000 crore.

Citi has retained its 'Buy' rating on RBL Bank with a price target of ₹440 per share. According to Citi, RBL Bank has leveraged its promoter's relationship with Emirates NBD to tap a large pool of FCNR(B) deposits from the UAE corridor. The bank has mobilised gross FCNR(B) deposits of $3.4 billion through the Reserve Bank of India's swap facility.

The EMTN programme will be established in accordance with Regulation S of the US Securities Act, 1933, subject to required regulatory, statutory and other approvals. RBL Bank has filed a stock exchange notification on September 7 for the establishment of the programme.