National Bank for Agriculture and Rural Development (Nabard) is planning to raise its maiden external commercial borrowing (ECB) in the current financial year.

The Reserve Bank of India (RBI) has given its approval but the exact date and amount is not fixed yet.

"We have the permission in place and have started work on it. We are keen to do the issue in FY26 itself. But we have not yet firmed up on the exact timeline or quantum to be raised," Nabard chairman Shaji KV told reporters on the sidelines of the annual FIBAC event on Tuesday.

Proceeds of the issue will be deployed for climate change-related financing activities for which funds are available at a discount, he said, adding that nearly the entire rural portfolio of the lender will qualify under the category.

Nabard is yet to appoint merchant bankers to undertake the fundraise. The borrowing costs will play an important role in determining the final outcome of the ECB plans, he said.

Nabard will first set up a representative office in the GIFT City to undertake the ECB. Later, it may open a full-fledged branch in the international financial services centre.

On being asked why the bank had not done any issuances in the domestic market despite having a borrowing calendar, Shaji said it had to do with the hardening of yields and higher borrowing costs from accessing the markets.