Mumbai: State Bank of India (SBI), the country’s largest lender by assets, has raised $1 billion (about Rs 9,100 crore) through a five-year loan from Japan's largest lender, Mitsubishi UFG Financial Group (MUFG), in the first social loan of its kind raised by a bank in the country.
The public sector lender plans to deploy the funds to lend to women or businesses helmed by women, documents accessed by ET showed. Social loans are either raised for specific purposes or the liabilities raised are matched to loans already given for specific purposes.
“The five-year loan was raised through the Gift City branch of MUFG and priced at 90 basis points above the three-month SOFR (secured overnight financing rate), a tighter pricing compared to what SBI’s peer HDFC Bank received through a similar loan deal in December 2025. MUFG is the sole bank in this deal, but the loan will be syndicated to a wider section of lenders,” a person familiar with the details said on condition of anonymity.
HDFC had raised $1 billion through a three and a half year loan priced at 94 basis points above the three-month SOFR in December. A basis point is a hundredth of a percentage point.
An MUFG spokesperson confirmed that the Japanese lender had been mandated by SBI for a $1 billion five-year loan, which included a green shoe option of $500 million. “SBI intends to deploy the proceeds from this facility towards women’s economic empowerment loans to help support gender equality and empower women which will be a first for an Indian bank. The loan syndication was launched on February 2 and is expected to close in March 2026,” the spokesperson said in response to ET’s emailed queries.
With the three-month SOFR at around 3.83% at the end of January, SBI will pay about 4.73% for the loan. Together with the dollar hedging cost, estimated at about 300 basis points, the loan rate is likely to be around 7.73%, said people in the know.
An SBI spokesperson did not reply to an email seeking comment.
Foreign lenders like MUFG have set targets to meet ESG (environmental, social and governance) targets. MUFG, for instance, has a $100 trillion yen ($660 billion) sustainable finance target till 2030 as part of its medium-term business plan.
In India, mostly non-banking financial companies have raised funds to finance specific lending intentions. Aditya Birla Housing Finance raised Rs 830 crore in January 2025 via non-convertibles debentures issued by the World Bank's International Finance Corporation. The funds were to be utilised to provide housing loans to low-income and middle-income groups, with a particular focus on encouraging homeownership among women, the company had said.
The public sector lender plans to deploy the funds to lend to women or businesses helmed by women, documents accessed by ET showed. Social loans are either raised for specific purposes or the liabilities raised are matched to loans already given for specific purposes.
“The five-year loan was raised through the Gift City branch of MUFG and priced at 90 basis points above the three-month SOFR (secured overnight financing rate), a tighter pricing compared to what SBI’s peer HDFC Bank received through a similar loan deal in December 2025. MUFG is the sole bank in this deal, but the loan will be syndicated to a wider section of lenders,” a person familiar with the details said on condition of anonymity.
HDFC had raised $1 billion through a three and a half year loan priced at 94 basis points above the three-month SOFR in December. A basis point is a hundredth of a percentage point.
An MUFG spokesperson confirmed that the Japanese lender had been mandated by SBI for a $1 billion five-year loan, which included a green shoe option of $500 million. “SBI intends to deploy the proceeds from this facility towards women’s economic empowerment loans to help support gender equality and empower women which will be a first for an Indian bank. The loan syndication was launched on February 2 and is expected to close in March 2026,” the spokesperson said in response to ET’s emailed queries.
With the three-month SOFR at around 3.83% at the end of January, SBI will pay about 4.73% for the loan. Together with the dollar hedging cost, estimated at about 300 basis points, the loan rate is likely to be around 7.73%, said people in the know.
An SBI spokesperson did not reply to an email seeking comment.
Foreign lenders like MUFG have set targets to meet ESG (environmental, social and governance) targets. MUFG, for instance, has a $100 trillion yen ($660 billion) sustainable finance target till 2030 as part of its medium-term business plan.
In India, mostly non-banking financial companies have raised funds to finance specific lending intentions. Aditya Birla Housing Finance raised Rs 830 crore in January 2025 via non-convertibles debentures issued by the World Bank's International Finance Corporation. The funds were to be utilised to provide housing loans to low-income and middle-income groups, with a particular focus on encouraging homeownership among women, the company had said.
