India may inject almost $20b into state-owned banks

A final decision could be made in H2 of India’s fiscal year.

India may need to pump up to $19.81b (INR1.5t) into state-owned banks as their pile of soured assets will likely double amidst the pandemic, reports Reuters.

At first, the government wanted a budget of $3.2b (INR250b) for lender recapitalisations but the amount rose significantly, with loan defaults likely to surge as the nationwide lockdown deals a severe blow to businesses.

The plans were still being discussed and a final decision could be made in the second half of the fiscal year. India’s fiscal year runs from 1 April.

Indian banks were already saddled with $125b (INR9.35t) worth of non-performing assets at the end of September 2019, or roughly 9.1% of their total assets at the time.

Here's more from Reuters.

Photo courtesy of Pexels.com.

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