State Bank of India is preparing to issue its first rupee-denominated perpetual bond of 2026, aiming to raise 50 billion rupees ($517.76 million) within the next two weeks, according to three bankers familiar with the matter. This would mark the first such issuance by any bank in India this year. Main Developments SBI is in advanced discussions with merchant bankers and investors to launch Basel III-compliant additional Tier I perpetual bonds with a five-year call option. The bank's board approved raising up to 600 billion rupees through debt this financial year, including long-term infrastructure bonds and other instruments. One banker indicated that if negotiations proceed smoothly, the issuance could be completed next week or at least before the central bank's monetary policy decision on August 5. The bankers requested anonymity as the discussions are private, and SBI did not respond to a Reuters email seeking comment. Read also: European Wildfires Trigger Mass Evacuations, Spain Declares Emergency Background State-run Canara Bank was the last lender to tap this market, raising 35 billion rupees through similar perpetual bonds at a 7.55% coupon in November 2025. SBI's previous perpetual bond issuance occurred in October 2024, when it raised 50 billion rupees at a 7.98% coupon with a 10-year call option. The upcoming issue would be the first rupee-denominated perpetual debt of 2026, reflecting a shift in SBI's funding strategy compared to its earlier longer-term offering. Why It Matters Perpetual bonds, which have no maturity date, help banks strengthen their core capital ratios under Basel III norms. SBI's move signals confidence in market conditions and may set a pricing benchmark for other Indian lenders considering similar issuances this year. What's Next The bank's timeline hinges on successful finalization of terms with investors. If the issuance occurs before August 5, it will precede the Reserve Bank of India's monetary policy decision, which could influence broader market rates. SBI's broader debt-raising plan of up to 600 billion rupees this fiscal year remains open, with potential for additional tranches.