Economics
Why India Is Pumping $32 Billion Into State Banks
Analyst Hazari Sees India's Bank Rescue Plan as Positive
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India’s struggling state-run banks are getting state aid. The government said in October it would inject 2.11 trillion rupees ($33 billion) over two years. The move is part of Prime Minister Narendra Modi’s goal to help lenders meet tighter capital-reserve requirements, as slower economic growth erodes borrowers’ ability to repay loans. Soured debt is now the highest since 2000, hampering credit expansion that’s needed to spur Asia’s third-largest economy.
Huge. The injection is more than twice the 930 billion rupees McKinsey & Co. estimates the authorities pumped into state-run banks between 2009 and 2016.