Indian Government Plans $26 Billion Sale of Public Bank Stakes

India plans to raise as much as Rs1.6 trillion ($26 billion) by selling down stakes in state-backed banks, in a potentially far-reaching move that could act as a precursor to future privatizations in the country’s state-dominated banking sector.

India’s government banks are severely undercapitalized, with rating agency Fitch suggesting that lenders will need to raise $200 billion in fresh capital by 2019 to meet Basel III banking norms and cope with a recent jump in problem loans.

In response, Prime Minister Narendra Modi has agreed plans to sell down stakes in 27 state-backed banks by 2019. Its holding will be cut to 52 percent in all cases, down from between 56 percent and 84 percent.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza