In February 2024, which bank raised US $ 300 million through its first ever sustainable-finance bond issue?
- (a)HDFC Bank
- (b)South Indian Bank
- (c)AXIS Bank
- (d)Yes Bank
Correct — A, HDFC Bank.
On 7 February 2024 HDFC Bank announced it had raised US$300 million through its maiden sustainable-finance bond. The issue was made at the GIFT City IFSC in Gujarat and formed part of a larger US$750 million overseas raise by the bank.
Proceeds of the sustainable-finance bond are earmarked for green and social loans, prioritised for electric vehicles, small businesses and affordable housing, rather than for the bank's general funding.
The idea to carry away: a sustainable-finance bond funds a mix of green and social projects, and HDFC Bank's US$300 million issue of February 2024 was the bank's first such bond.
- (b)South Indian Bank — South Indian Bank is one of several old private-sector banks headquartered at Thrissur, Kerala, alongside CSB Bank and Dhanlaxmi Bank; it was founded in 1929.
The February 2024 US$300 million sustainable-finance bond described in the stem was issued by HDFC Bank, so this option does not match the event asked about.
- (c)AXIS Bank — Axis Bank's landmark ESG issue differs in instrument and in date. In September 2021 it raised US$600 million through sustainable Additional Tier-1 (AT1) notes via its GIFT IFSC banking unit, described as the first sustainable AT1 issue by an Indian bank, and listed on India INX and NSE IFSC.
That is the answer to a 2021 AT1 question, not to a February 2024 US$300 million first-ever sustainable-finance bond.
- (d)Yes Bank — Yes Bank's claim to fame is India's first green infrastructure bond: a rupee issue of Rs 1,000 crore with a ten-year tenor in February 2015, funding renewable energy such as solar and wind.
It answers a 'first green infrastructure bond in India' question. That was a 2015 rupee green bond, not a US$300 million sustainable-finance bond of February 2024.
Sustainable-finance instruments are labelled by what the money is spent on. A green bond funds environmental projects such as renewable energy; a social bond funds social projects such as affordable housing or small-business lending; a sustainability bond, also called a sustainable-finance bond, funds a mix of the two.
A sustainability-linked bond is different in kind: its proceeds are unrestricted, but the coupon changes if the issuer misses a pre-set sustainability target. A bank issuing a use-of-proceeds bond typically publishes a framework listing eligible loan categories and reports on how the money was allocated.
Indian banks have raised ESG-labelled money in stages: Yes Bank's rupee green infrastructure bond in 2015, Axis Bank's dollar sustainable AT1 notes in 2021, and HDFC Bank's dollar sustainable-finance bond in 2024. The Government of India began issuing sovereign green bonds in January 2023.
GIFT City's international exchanges, India INX and NSE IFSC, serve as a listing venue for such offshore issues by Indian banks, which is why the HDFC Bank and Axis Bank bonds are listed there.
- HDFC Bank announced on 7 February 2024 that it had raised US$300 million through its maiden sustainable-finance bond.
- The bond is a use-of-proceeds instrument: the money is earmarked for eligible green and social lending rather than for the bank's general funding.
- It formed part of a larger US$750 million raise by HDFC Bank at the GIFT City IFSC in Gujarat.
- GIFT City's IFSC hosts India INX and NSE IFSC, the international exchanges Indian banks use for offshore listings.
- Proceeds of the sustainable tranche fund green and social loans, prioritised for electric vehicles, small businesses and affordable housing.
- India began issuing sovereign green bonds in January 2023, a separate line of ESG issuance from bank-issued bonds.
- Axis Bank raised US$600 million through sustainable Additional Tier-1 notes in September 2021 via its GIFT IFSC banking unit, described as the first sustainable AT1 issue by an Indian bank.
- Yes Bank issued India's first green infrastructure bond in February 2015, raising Rs 1,000 crore with a ten-year tenor for renewable-energy lending.
The keyed row is the one that matches each element of the stem: bank, month, amount and instrument.
- Treating 'sustainable-finance bond' as a synonym for 'green bond' and reaching for Yes Bank, whose landmark is a 2015 rupee green infrastructure bond, not a 2024 dollar issue.
- Confusing the US$300 million sustainable tranche with the US$750 million total raised in the same offering; the stem asks about the sustainable-finance bond alone.
- Linking Axis Bank to 'sustainable dollar bond' from its September 2021 issue, which was Additional Tier-1 capital, a different instrument and a different year.
- Reading 'first ever' as India's first ESG bond rather than HDFC Bank's first sustainable-finance bond; India's first green infrastructure bond was Yes Bank's, in February 2015.
This item is direct recall of a dated banking event: the month, the amount, the instrument and the issuer. A variant swaps which element is asked for, such as the amount (US$300 million), the issuer, the venue of the raise (the GIFT City IFSC) or the use of proceeds.
Statement-based versions test whether the sustainable tranche is distinguished from the full US$750 million raise, and match-the-following versions pair each bank with the year and type of its landmark ESG issue.
NDA_GAT_2024_I_Q1492024The same demand from the same month: a dated February 2024 current-affairs fact pulled from a four-option list, there the country whose Free Movement Regime with India was to be scrapped. The subject differs entirely — a border-policy decision rather than a bank's bond issue — so nothing carries over as content. What carries over is the format: the month is given, one named party has to be supplied, and a candidate who read the news that month without fixing which name went with which event scores neither.
- practice — not a real PYQ
Under the International Capital Market Association (ICMA) framework, a 'sustainability bond' is best described as a bond whose:
- (a)proceeds are applied exclusively to environmental projects such as renewable energy
- (b)proceeds are applied to a combination of green and social projects
- (c)coupon changes according to whether the issuer meets a pre-set sustainability target, with proceeds unrestricted
- (d)proceeds are applied exclusively to social projects such as affordable housing
Answerb — A sustainability bond finances a mix of eligible green and social projects, which is why HDFC Bank's sustainable-finance bond funds electric-vehicle loans (green) alongside affordable-housing and small-business loans (social).Option (a) describes a green bond and option (d) a social bond, each restricted to one category. Option (c) describes a sustainability-linked bond, whose proceeds are general-purpose and whose coupon is tied to a target.
- practice — not a real PYQ
Consider the following statements about HDFC Bank's overseas bond issue announced in February 2024: 1. The bank raised US$300 million through its maiden sustainable-finance bond. 2. The issue was made at the GIFT City IFSC in Gujarat. 3. The sustainable-finance bond formed part of a larger US$750 million raise. Which of the statements given above is/are correct?
- (a)1 and 2 only
- (b)2 and 3 only
- (c)1 and 3 only
- (d)1, 2 and 3
Answerd — Statements 1, 2 and 3 are each correct. HDFC Bank announced on 7 February 2024 that it had raised US$300 million through its first sustainable-finance bond, made at the GIFT City IFSC.That US$300 million was one part of a larger US$750 million raise by the bank. Options (a), (b) and (c) each drop a statement that is in fact true.
- practice — not a real PYQ
Which of the following banks issued India's first green infrastructure bond, raising Rs 1,000 crore in February 2015?
- (a)HDFC Bank
- (b)Yes Bank
- (c)Axis Bank
- (d)South Indian Bank
Answerb — Yes Bank's ten-year green infrastructure bond of February 2015 was India's first, with proceeds for renewable energy such as solar and wind.Option (a) HDFC Bank's landmark is the February 2024 US$300 million sustainable-finance bond; option (c) Axis Bank's is the September 2021 US$600 million sustainable AT1 issue; option (d) South Indian Bank, a Thrissur-based old private-sector bank, was not the issuer of the 2015 bond.