Axis Bank has raised a $500 million offshore loan from Japan’s Mitsubishi UFJ Financial Group, in a deal that highlights strong global demand for Indian bank credit amid tightening liquidity conditions in the domestic financial system. The transaction was confirmed by people familiar with the development and marks a significant international funding move by one of India’s largest private lenders.
The three-year loan facility has been structured with pricing linked to the secured overnight financing rate (SOFR) plus a margin of 85 basis points, according to sources cited in the report. The funds are expected to be used by Axis Bank for lending activities as well as general corporate purposes, supporting its ongoing credit expansion strategy.
The loan was arranged with Mitsubishi UFJ Financial Group acting as the sole mandated lead arranger and bookrunner. The facility is currently being syndicated to a wider group of global lenders, indicating additional participation from international financial institutions as the transaction progresses toward full closure.
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The fundraising comes at a time when Indian banks are facing a widening gap between loan growth and deposit mobilisation. Axis Bank’s lending book grew by about 19% to ₹12.3 trillion (approximately $130 billion) in the financial year ended March, while deposits increased by around 14%, reflecting tighter liquidity conditions in the banking sector.
Market observers say such offshore borrowings are increasingly being used by Indian banks to bridge funding gaps and diversify their liability base. By tapping international credit markets, lenders like Axis Bank can access relatively cheaper or more stable funding sources, especially when domestic deposit growth lags behind credit demand.
Neither Axis Bank nor MUFG immediately responded to requests for official comment on the transaction details. However, the deal underscores continued investor confidence in India’s banking sector and its long-term credit growth prospects, even amid evolving global interest rate conditions and liquidity pressures.
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