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HONG KONG, Sep 14 (Reuters) Bank of India is expected to price a $200 million, 15-year upper tier-II subordinated bond on Thursday at a yield lower than initially indicated after it was more than six times subscribed, market sources said.

It will be the second upper tier-II issue from an Indian borrower.

Bank of India lowered the indicative yield range to 140 to 145 basis points over mid-swaps from an initial guidance of 145 to 155 basis points over mid-swaps, the sources said.

The deal, callable in 2016, had attracted over $1.2 billion and was expected to be priced on Thursday during London trading hours, they said.

Barclays Capital, Citigroup, Deutsche Bank and HSBC are joint bookrunners for the upper tier II issue.

Last month, UTI Bank raised $150 million through a 15-year, upper tier-II subordinated bond and ICICI Bank, India's second-largest lender, sold $340 million in hybrid tier-I securities.

Other offers attracted strong demand as investors were betting on India's robust economic growth. India's economy is expected to expand 7.5 to 8.0 percent in 2006/07.

State Bank of India, the country's largest lender, and Canara Bank Ltd. also plan to raise U.S. dollar subordinated bonds.

State Bank of India is looking to issue $200 million through upper tier-II bonds, while Canara Bank plans to raise $100 million through hybrid tier-I bonds and $200 million in upper tier-II bonds.

REUTERS VJ RN0620