However, the issue has not evoked a big response from the US, which has a huge populations of NRIs. ``State Bank of India (SBI) didn't do much to get the clearances of individual states. Had SBI got separate permission from various states in the US well in advance, the collection would have gone up significantly,'' said a banking source.

SBI managed to get the nod of Securities and Exchange Commission (SEC), the market regulator of the US, only at eleventh hour. However, such issues need permission from each state separately for marketing there.

Despite this, the RIB issue has managed to collect almost double the targeted figure of $ 2 billion. The RIB issue was announced in theUnion Budget by the finance minister, Yashwant Sinha as a measure to tackle the sanctions announced by various countries after the nuclear explosion. Unit Trust of India (UTI) is waiting for the RIB issue to close for launching its Millennium bond issue.

Hawala operators are also investing large amounts in Resurgent India Bonds on their own initiative, with the idea of selling it at a premia to "needy" Indians at a later stage. The memories of the lucrative opportunity that the India Development Bonds (1992-97) offered are still fresh with the hawala operators.

The premiums on the IDBs soared to 20-25 per cent at the time of redemption as demand grew from resident Indians keen on "white-washing" their unaccounted wealth. India Development Bond was able to mop up $ 1.6 billion over a period of four months. RIBs offer identical features that made India Development Bond a very cost-efficient money laundering tool.

Both the bonds are exempt from Income tax, wealth tax and gift tax and are permitted to begifted to resident Indians. According to market sources, the RIBs are expected to witness large subscription on the closing date of the issue as hawala operators will be making most of their subscriptions then.SBI is set to strike the first off-market deal with the Reserve Bank of India for swapping the foreign currency proceeds with the rupee this week.

The swap deal is expected to ease the pressure on the rupee which dipped to 43.67/70 against the dollar recently before recovering to 42.55 on Friday.The SBI is likely to deploy about Rs 5000 crore of RIB proceeds in government securities.