Why India Is Pumping $32 Billion Into State Banks

India’s struggling state-run banks are getting state aid. Call it a recapitalization, call it a bailout, call it what you like, the government is injecting 2.11 trillion rupees ($32 billion) over the next 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.

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