Why is India Pumpting $32 Billion into its Banks?

India’s government on Tuesday announced a massive bank recapitalization plan worth tens of billions of dollars — a possible “game changer” for the country’s bad loans problem.The plan could not only provide cheer for investors worried about Indian banks’ worsening balance sheets, but it may also have far-reaching implications for the country’s economic prospects.The announcement has been awaited for a long time. India’s growing mountain of bad loans has created weak bank balance sheets, crippling the lending ability of financial institutions and hindering the country’s growth. That, in turn, makes debtors less able to pay off loans — creating a vicious cycle.

Source: India just said it’s pumping $32 billion into its banks — here’s why it matters – CNBC

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.