26-JUN-2025,04 :30PM T In a significant move aimed at boosting infrastructure development and meeting long-term funding requirements, the Bank of India has announced the sanction of raising ₹20,000 crore through Long-Term Infrastructure Bonds. This strategic decision was approved by the bank’s board, signaling its proactive approach to strengthening capital resources and aligning with the government’s infrastructure-focused agenda.
The announcement comes amid India’s growing emphasis on infrastructure development, which is pivotal for economic growth, employment generation, and enhancing the nation’s global competitiveness. As one of the major public sector banks, Bank of India‘s decision reflects its commitment to supporting long-gestation projects that are critical to national development.
Bank of India Commits to Infrastructure Growth
The Bank of India (BoI), a leading public sector bank with a century-long legacy, is once again in the spotlight for its forward-thinking decision to raise ₹20,000 crore via Long-Term Infrastructure Bonds. This bold financial strategy aims to channel large-scale capital into sectors such as roads, railways, renewable energy, and urban development.
The move is not just a capital-raising exercise but a reflection of the bank’s deeper commitment to align with the government’s vision of a $5 trillion economy. By investing in infrastructure financing, Bank of India is positioning itself as a key player in India’s growth story.
Bank of India :Details of the Bond Issuance Plan
Bank of India : Sanctioned by the Board
According to the official release, the board of Bank of India approved the proposal to raise ₹20,000 crore through Long-Term Infrastructure Bonds in one or more tranches. The bonds will be issued over a period depending on the bank’s fund requirements and prevailing market conditions.
This decision empowers the bank to tap into both institutional and retail investors looking for stable, long-term investment opportunities. Infrastructure bonds, typically used to finance long-term projects, offer tax benefits under Section 80CCF of the Income Tax Act, making them attractive to investors.
Bank of India :Objectives Behind the Move
The primary objective behind issuing these bonds is to secure long-term, low-cost funds that can be utilized for lending to core infrastructure sectors. This includes:
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Transportation and logistics (roads, highways, ports)
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Urban housing and sanitation
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Renewable energy projects (solar, wind)
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Smart cities and digital infrastructure
The bank also aims to improve its Asset-Liability Management (ALM) by matching the long tenure of infrastructure projects with long-term sources of funds.
What Are Long-Term Infrastructure Bonds?
Understanding the Instrument
Long-Term Infrastructure Bonds are debt instruments that help banks raise capital specifically earmarked for financing infrastructure projects. These bonds usually have a tenure of 7 years or more, and their proceeds are directed toward capital-intensive projects that require steady funding.
In India, such instruments are crucial because traditional bank deposits are short-term, whereas infrastructure projects require long gestation periods. Hence, infrastructure bonds bridge this funding mismatch.
Benefits to the Economy
The issuance of infrastructure bonds by Bank of India will have multiple positive ripple effects:
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Encourages private sector participation in infra projects
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Promotes sustainable, long-term economic development
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Attracts domestic and global investors to India’s infrastructure story
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Supports job creation in construction and allied industries
Moreover, this move is expected to support the central government’s ambitious targets under the National Infrastructure Pipeline (NIP) and Gati Shakti Yojana.
Bank of India’s Strategy and Financial Health
Strong Fundamentals and Recovery Mode
The decision to raise funds comes at a time when Bank of India has demonstrated improved financial performance. In its recent quarterly report, the bank reported a healthy increase in net profit, improved asset quality, and better capital adequacy ratios.
These positive indicators boost investor confidence and provide a solid foundation for such a large capital-raising plan. With a strong customer base and expanding digital footprint, the bank is well-poised to deploy these funds effectively.
Aligning with ESG and Sustainable Lending
Apart from infrastructure, Bank of India is also focusing on Environmental, Social, and Governance (ESG) principles. The bank may consider green bonds or sustainability-linked bonds in its future tranches to support climate-resilient infrastructure.
This approach will help the bank not only meet financial objectives but also contribute meaningfully to global climate goals and India’s net-zero vision by 2070.
Sectoral Impact of the ₹20,000 Crore Infusion
Infrastructure Sector to Get a Boost
The infrastructure sector in India has been awaiting large-scale funding to overcome delays and incomplete projects. With Bank of India stepping in, ongoing and proposed projects in roads, highways, metro networks, and smart cities could receive the much-needed liquidity.
Such infusion is expected to fast-track stalled projects and initiate new developments across Tier 1, 2, and 3 cities.
Banking Sector’s Role in National Development
By taking a proactive stance, Bank of India is setting a precedent for other public and private sector banks to follow suit. As the government looks towards financial institutions to play a key role in achieving economic revival, this move underscores the banking sector’s role in nation-building through structured capital support.
Conclusion: A Defining Step by Bank of India Toward Future Growth
The decision by Bank of India to raise ₹20,000 crore through Long-Term Infrastructure Bonds marks a significant milestone in India’s financial and infrastructure ecosystem. It’s a clear signal that public sector banks are not just back in the game but are also ready to take the lead in powering India’s economic transformation.
As the nation builds new roads, bridges, metros, and digital networks, the capital raised by Bank of India will play a crucial part in turning blueprints into reality. This initiative isn’t just about finance — it’s about laying the groundwork for a more connected, efficient, and empowered India.
Sourcre : ANI
