Economics
India to Inject $32 Billion Into State Banks to Boost Loan Growth
- Proposed spending is 10-fold higher than previous pledge
- India seeks to revive bank loan growth from 25-year low
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India will inject 2.11 trillion rupees ($32 billion) of capital into state-controlled lenders over two years, an amount that’s ten-fold higher than the government’s previous pledge as it seeks to revive growth in Asia’s third-largest economy.
The government will sell 1.35 trillion rupees of recapitalization bonds while banks will raise another 760 billion rupees through “budgetary support” and from the markets, Rajiv Kumar, banking secretary at India’s Finance Ministry said at a briefing on Tuesday. The government also announced plans to spend $108 billion on building highways in the next five years.