The bank is planning to issue bonds for Rs 700 million at a coupon rate of 11.35 percent annualised. The issue has a tenor of 63 months.

The bank is an associate bank of the State Bank of India.

India's apex bank for rural financing National Bank for Rural Development (NABARD) on Friday floated priority and non-priority sector bonds.

The bank is going through the private placement route andis aiming to raise Rs 2 billion along with a greenshoe option for an unspecified amount, money market brokers said. The coupon for priority sector bonds- which has two options- will be decided after a book-building process. In the first option, bonds will have a tenor of 82 months and the coupon will range between 10.25-10.75 percent, interest payable annually. The bond has a call and put option after 58 months.

In the second option, the bonds will have a tenor of 58 months with a coupon ranging from 10.0-10.50 percent interest payable annually. The bond has call and put option after 34 months. Banks in India are required to apportion a certain amountof their loanable funds towards priority sector investments under Reserve Bank of India (RBI) guidelines.

NABARD's non-priority sector bonds also offer two options. The bonds which have tenor for 82 months- with a call and put after 58 months -- will carry a coupon ranging from 10.75-11.25 percent annualised.

The bonds with a 58 month tenor with a call and put option after 34 months will carry a coupon of 10.40-10.90 percent interest payable annually. The IFCI Ltd is also raising funds by issuing bonds through the private placement route. The financial institution is raising Rs 750 million along with a greenshoe option for an unspecified amount. The issue has three options. In the first option, ten-year bonds are being issued at acoupon rate of 12.40 percent annualised. In the second option, seven-year bonds are carrying a coupon of 12.25 percent, interest payable annually and in the third option the five-year bonds will carry a coupon of 12 percent interest payable annually. The bonds issued by all three banks and financial institutions are being lead managed by SBI Capital Markets.