In return, the banks must implement reforms to boost lending and solve bad debt.
India's government will inject nearly $14b into all state banks except for one by March, Reuters reports. With the funding, the banks must then implement reforms to boost lending and solve the worsening bad debt problem.
India announced in October 2017 that it would inject $33.1b (2.11t rupees) into state banks in 2 years. The first $14b (881b rupees) will be in March whilst the rest will be over the next fiscal year.
According to Reuters, the funds will be injected into 20 banks majority-owned by the government. Together, these lenders hold most of the country's record $150b in soured loans. The report said that lenders with high stressed-asset ratios, such as IDBI Bank, will get a bigger portion of the money.
"All public sector banks will be adequately capitalized and enabled to serve people and support inclusive growth," Rajeev Kumar, India's top banking bureaucrat, said in a news conference. "Capitalization is dependent on the compliance of reforms."
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