MUMBAI: Indian Bank is turning to longer-duration bond funding as it seeks to support stronger credit growth and capital needs, with weak deposit traction and a spike in bulk deposit rates squeezing its funding mix, MD and CEO Binod Kumar told Reuters . The state-run lender will issue seven-year infrastructure bonds worth 50 billion rupees ($537.25 million) next week and has already held discussions with long-term investors, including the Employee Provident Fund Organisation, which has been an active buyer in recent bank bond issuances. Reuters reported on Wednesday that the bank is likely to launch a seven-year or 10-year infrastructure bond sale before the end of March. “Credit growth will pick up in the last month of the financial year, so instead of going for certificates of deposit that are very expensive at the moment, we decided to take the infra bond route,” Kumar said on Thursday. Indian Bank, infrastructure financier NaBFID to raise 80 billion rupees via bonds by March Indian Bank expects the cutoff yield for its upcoming bond issue to be in the 7.11% to 7.24% range. Earlier in the week, the lender raised three-month funding at 7.23%, about 28 basis points higher than levels at the start of the month, underscoring rising funding costs. This will mark the bank’s first bond market issuance in more than 17 months. In October 2024, it raised 50 billion rupees via 10-year infrastructure bonds at a 7.12% coupon. The bank currently has 100 billion rupees of such bonds outstanding. The planned issuance follows a broader pickup in infrastructure bond fundraising, with Union Bank of India set to raise 75 billion rupees through 10-year bonds later in the day. Earlier in the month, Bank of Baroda raised 100 billion rupees through seven-year bonds at 7.10%, with the issue witnessing aggressive bids.