The country’s largest mortgage lender, Housing Development Finance Corporation, is set to become the first Indian borrower to benefit from the Reserve Bank’s increased external commercial loan limit of $750 million or its equivalent of $1.5 billion per fiscal year under the automatic route.

The Economic Times reported on July 11, citing people familiar with the matter, that HDFC is seeking to increase its foreign loans to around $1 billion from the previous $750 million. The cost of capital will remain unchanged, it added.

The non-banking financial company will use the extra capital to lend to low-cost, affordable housing buyers.
According to the report, State Bank of India, India’s largest public sector bank, has joined the syndication process, with Mizuho Bank, Mitsubishi UFJ Financial Group, and Standard Chartered confirming their participation.

Notably, the RBI announced various measures to increase foreign exchange inflows last month.

The minimum average maturity required by the ECB for eligible borrowers in the infrastructure sector has been reduced to three years from the previous five years.

In addition, the central bank announced that the average duration requirement for mandatory hedging had been lowered to five years from the previous ten years.

The RBI has used its foreign exchange reserves to protect the rupee from a sharp depreciation since the Russia-Ukraine war started in late February.