The SBI chairman said part of the RIB proceeds may be used to fulfil financial institutions' forex commitments to Indian corporates. "The assets will be kept in SBI's books," Verma said. In essence, the State Bank will lend foreign currency loans to institutional clients.

The issue -- essentially a five-year NRI deposit scheme available in three currencies to the non-resident Indians and overseas corporate bodies -- opened on August 5 for a period of 30 days. The earliest closing date is August 17.

"It is very difficult to say with certainty that the earliest closing date will be extended. However, we will have to look at it closely as we do not want to deprive the retail investors....," the SBIchairman said.

"The India Development Bond attracted 85,000 depositors. The Resurgent Bond will certainly surpass that record and a large section of the investments (in RIBs) will be high-value participation," Verma said.On being asked whether keeping the high-cost funds abroad will have an impact on the State Bank's bottomlines, Verma said: "We will keep between $500 million and $700 million abroad. This money can be used temporarily to buy Indian papers or to back our existing foreign assets... Then, we can extend foreign currency loans to Indian corporates from this corpus. There is good demand for ECBs... We will not make loss on the RIB proceeds."

The State Bank chief sounded upbeat about the total mopup through this instrument. "There is an overwhelming response in the Middle East... In the US we have just started selling the instrument... It will take a few days to get the corrent numbers," Verma said.