The borrowing was arranged through HDFC Bank’s branch at GIFT City and split between two maturities. Bonds with a five-year tenure brought in $1.25 billion, while the three-year portion contributed $500 million. Together, they represent the biggest single debt-raising transaction by an Indian bank.

HDFC Bank’s cumulative dollar bond fundraising since June now stands at $2.50 billion, compared with ICICI Bank’s $2.05 billion. Investor demand for the latest offering reached $7 billion, comfortably exceeding the amount raised and surpassing the bank’s expectations.

That demand helped bring borrowing costs below expectations. The three-year tranche carried a spread of 88 basis points above US Treasury yields; the five-year tranche had a 100-basis-point spread. These levels were higher than HDFC Bank’s June pricing, but better than CreditSights analysts had anticipated.

The transaction used an RBI facility that makes overseas fundraising easier for banks. Its closing date has been advanced by a month to August 31. Most proceeds are intended for lending to customers placing money in a special dollar deposit scheme. The RBI anticipates inflows of nearly $80 billion across the various schemes, rather than from this bond issue alone.