India to inject about $ 3 b in state-owned banks

Reuters: India plans to inject about $3 billion into state-owned banks this fiscal year, and potentially $6 billion next year, to help recapitalise the sector and allow it to meet Basel III rules, Finance Secretary Rajiv Mehrishi told news channel CNBC-TV18.

The intended injection into state banks is significantly higher than the estimate of 79.4 billion rupees ($1.25 billion) given in the government’s budget for this fiscal year. “What we are aiming at is an infusion of about $3 billion in the current year and perhaps twice as much in the next year,” Mehrishi told the news channel during a trip to San Francisco.

Mehrishi is accompanying Finance Minister Arun Jaitley on a US visit seeking more investment in India.

Mehrishi added he did not have a specific time frame for the injections.

The finance secretary said India could finance the increased injection amount through supplemental funding that is available to the government outside the budget.