India lends US$2.29 billion to public sector banks

Bonanza to be followed by a second tranche in early 2014.

India’s Ministry of Finance has released US$2.29 billion for the capitalization of government banks. “The government will infuse the funds through preferential allotments,” said Finance Minister P Chidambaram. The paperwork on the capital infusion will be completed today after which details will be made public. Finance ministry sources said there will be another round of capital infusion before the end of this fiscal year in March 2014. The ministry estimates there will be additional requirement for capital due to the improving economy and the festive season offers made by the public sector banks.