REVENUE STRATEGY - I.D.B.I.

1. Industrial Development Bank of India Ltd., the nation's seventh biggest by assets, plans to increase its overseas bond sales by 50 percent to $1.5 billion over the coming year to meet credit demand and fund expansion.It plans its first bond sale under a medium-term note program in the next few months
2. It hired HSBC Holdings Plc and Barclays Plc to sell the bonds, which may mature in either five, seven or 10 years.
3. The bank will use part of the proceeds to pay for new offices in Singapore and Bahrain.
4. Industrial Development Bank will list the bonds in Singapore.
The rationale:
1. India's banks are expanding overseas to meet demand for financial services from domestic companies that are setting up or acquiring international businesses, and from Indians working abroad.
2. The banks are increasingly borrowing outside India to benefit from lower interest rates and the better availability of money in international markets. (India's central bank has been increasing interest rates since October 2004 to curb inflation stoked by economic growth. The bank on March 30 raised its overnight lending rate to a 4 1/2-year high of 7.75 percent.)
3. Rising rupee rates make it more attractive for Indian companies to borrow funds abroad.

The upside of globalization is that Central bank restrictions can be bypassed.
The downside of globalization is that the Central bank loses control.

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