Mumbai, Feb. 13 -- State-run lenders, including Canara Bank, Bank of Baroda, Bank of Maharashtra and Bank of India, are preparing to tap the debt market through infrastructure bonds in early March, but are holding off the issuances as they wait for borrowing costs to ease, three debt merchant bankers aware of the discussions told Mint.

This underscores lenders' funding pressures: with growth in deposits lagging credit, banks are seeking long-term, regulation-efficient funding even as elevated corporate bond yields have made such issuances costly for now. Bankers say the timing hinges on expectations of further liquidity support from the central bank to bring rates down.

Bankers and market participants said lenders are sounding out inves...