"It is like a gift from the government," a banking analyst in a leading foreign institutional investor said. "The bank is likely to post a 20 per cent growth in assets compared with 16 per cent in the previous year. This is encouraging as it will come in a year when the economy is witnessing a downturn," said Anand Shanbagh, banking analyst with Kotak Securities. "The real impact will definitely be seen in FY 2000," he added.

SBI is launching the RIB for non-resident Indians and overseas corporate bodies and has pegged the coupon at 7.75 per cent for dollar-denominated bonds, 8 per cent for pound sterling and 6.5 per cent fordeutche marks.

Analysts said that by the time the funds come through, the traditional busy season will kick off with credit growing by leaps and bounds.

"If they are able to get the same yield as they are getting in the normal course, these funds, which amount to Rs 8,000 crore, are likely lead to an additional profit of Rs 150-200 crore for the financial year," an analyst in a leading domestic brokerage said.

Although the cost of RIB is higher than SBI's average cost of funds, which is little less than 8.5 per cent, the returns on infrastructure projects are also quite high, he said.

The funds will add Rs 8,000 crore to the incremental growth in deposits which, on an average, are to the tune of Rs 16,000 crore. "The bank will definitely have more lendable resources this fiscal," an analyst said.

The cost of funds, which works out to 9.20 per cent for the SBI, is much cheaper than other resources that the bank has access to. "Alternate resources are costlier and 9.25 per cent is not all that high,"Shanbagh said. The bank has already said that it is aiming to make a big impact in infrastructure financing and the housing sector and the RIB will help it in a big way.

"It would have been difficult for the bank to achieve a 20 per cent asset growth in this difficult year. A lot of projects will need funds and SBI will be taking only 20 per cent of the total exposure. So asset growth should not be a problem," another analyst in a local broking house said.

"Raising long-term funds cheaply to finance these sectors is not easy. Any bank would like to launch such bonds," a banker in a leading public sector bank said.

However, analysts said that given the state of the economy, non-performing assets will continue to grow. "Fresh NPA recoveries will be low and the sticky assets will make a dent in the bank's profit this year," an analyst in an FII said.