MUMBAI, Sept. 11 -- Bank of India plans to raise about $1 billion through overseas foreign currency borrowings (OFCB) by December to benefit from a subsidy offered by the central bank toward the cost of hedging foreign-currency funding, according to two people familiar with the matter.

The state-owned lender is looking to raise funds through both a three- and five-year paper, the people said. The $1 billion target may change, depending on pricing moves in the future, they added.

Bank of India mobilized $2.2 billion through the Reserve Bank of India's foreign currency non-resident bank, or FCNR(B), deposit window, the two people said. A large share of the FCNR(B) deposits came from Singapore, Hong Kong and through the GIFT City route.

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