The Asian Development Bank is all set to enter the Indian capital market with a bond issue to raise upto Rs 100 million (Rs 10 crore) as it has obtained the Reserve Bank of India's and ministry of finance's approval.

"We have got all clearances like RBI and the ministry of finance...when to move ahead depends upon the market," Louis de Jonghe, country director, ADB said in New Delhi on Friday.

With this, ADB would become the first multilateral financial institution to hit the Indian capital market to float the rupee bond. The World Bank is also planning to float such bonds in India.

Jonghe, however, did not reveal other details about the bond issue like the maturity period of the bonds.

ADB is proposing to raise funds in rupee terms to cater to the private sector, as there was no appetite for dollar loan in the private sector, Jonghe said.

Moreover, ADB channels all its loans through the central government and there was no way for the Centre to stand as guarantee for the private sector.

The entire funds would be recycled in India only for the private sector participation, he said, adding that as per ADB's estimates there was enough demand in the sector and hoped the money would be distributed quickly.

ADB has a separate arm for lending to private companies, but it has so far extended loans to the Indian companies and financial institutions through the government.

The multi-lateral institution now views India as one of the fastest growing markets and intends to hike its exposure to the private sector.

ADB plans to float medium-long term bonds, which would be used for lending to infrastructure projects.

Although the ADB officials did not reveal the coupon rates or the maturity period, it is expected to be nearer to that of the government securities.